Forming an Opinion and Reporting ConsideForming an Opinion and Reporting Considerations

Forming an Opinion and Reporting Considerations

1. When forming an opinion and reporting on a special purpose financial report, the auditor shall apply the requirements in ASA 700.[6] (Ref: Para. A13–A19)

Description of the Applicable Financial Reporting Framework

1. ASA 700 requires the auditor to evaluate whether the financial report adequately refers to or describes the applicable financial reporting framework.[7] In the case of a financial report prepared in accordance with the provisions of a contract, the auditor shall evaluate whether the financial report adequately describes any significant interpretations of the contract on which the financial report is based.
2. ASA 700 deals with the form and content of the auditor’s report, including the specific ordering for certain elements. In the case of an auditor’s report on a special purpose financial report:
   1. The auditor’s report shall also describe the purpose for which the financial report is prepared and, if necessary, the intended users, or refer to a note in the special purpose financial report that contains that information; and
   2. If management has a choice of financial reporting frameworks in the preparation of such a financial report, the explanation of management’s[8] responsibility for the financial report shall also make reference to its responsibility for determining that the applicable financial reporting framework is acceptable in the circumstances.

Alerting Readers that the Financial Report is Prepared in Accordance with a Special Purpose Framework

1. The auditor’s report on a special purpose financial report shall include an Emphasis of Matter paragraph alerting users of the auditor’s report that the financial report is prepared in accordance with a special purpose framework and that, as a result, the financial report may not be suitable for another purpose. (Ref: Para. A20–A21)

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