example 3: qualified opinion where the fexample 3: qualified opinion where the financial report of the prior period was audited by another auditor and the incoming auditor is unable to obtain sufficient appropriate audit evidence regarding the comparatives, the current auditor’s report is qualifed on the basis of a scope limitation, and the qualification section refers to the predecessor auditor’s report (paragraph 21)

example 3: qualified opinion where the financial report of the prior period was audited by another auditor and the incoming auditor is unable to obtain sufficient appropriate audit evidence regarding the comparatives, the current auditor’s report is qualifed on the basis of a scope limitation, and the qualification section refers to the predecessor auditor’s report (paragraph 21)

INDEPENDENT AUDITOR’S REPORT

To the members of [name of entity]

Report on the Financial Report[5]

We have audited the accompanying financial report of [name of entity], which comprises the balance sheet as at 30 June 20X1, the income statement, statement of changes in equity and cash flow statement for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration.

Directors’ Responsibility for the Financial Report

The directors of the [company/registered scheme/disclosing entity] are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. [In Note XX, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards.]

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the [company/registered scheme/disclosing entity] preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the [company/registered scheme/disclosing entity]’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.