example 3: financial report prepared on example 3: financial report prepared on the entity’s income tax basis

example 3: financial report prepared on the entity’s income tax basis

INDEPENDENT AUDITOR’S REPORT

[Appropriate Addressee]

We have audited the accompanying financial report of [name of entity], which comprises the balance sheet as at 30 June 20XX, and the income statement and a summary of significant accounting policies and other explanatory notes.

The [Responsibility of Those Charged with Governance][8] for the Financial Report

[Those charged with governance] are responsible for the preparation and presentation of the financial report in accordance with the tax basis of accounting for the purpose of [describe purpose e.g. filing the income tax return with the relevant tax authority]. This responsibility includes establishing and maintaining internal controls relevant to the preparation and 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.

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. These Auditing 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 entity’s preparation and 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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by [those charged with governance], as well as evaluating the overall presentation of the financial report.

The financial report has been prepared in accordance with the tax basis of accounting for the purpose of [describe purpose, e.g., filing the income tax return of [name of entity] with the relevant taxation authority]. The financial report may not be suitable for another purpose. Our report is intended solely for [name of entity] and should not be distributed to or used by parties other than [name of entity].