Document ID: chunk:federal_register_of_legislation:F2023C01137:body:0:p5
Version: federal_register_of_legislation:F2023C01137
Segment Type: other
Provision Reference: 
Character Range: 12312–15523

could represent a substantial proportion of the financial report; or

(iii)             In relation to disclosures, are fundamental to users' understanding of the financial report.

(b)                Modified opinion – A qualified opinion, an adverse opinion or a disclaimer of opinion on the financial report.

Requirements

Circumstances When a Modification to the Auditor's Opinion is Required

6.                   The auditor shall modify the opinion in the auditor's report when:

(a)                The auditor concludes that, based on the audit evidence obtained, the financial report as a whole is not free from material misstatement; or (Ref: Para. A2–A7)

(b)                The auditor is unable to obtain sufficient appropriate audit evidence to conclude that the financial report as a whole is free from material misstatement.  (Ref: Para. A8–Aus A12.1)

Determining the Type of Modification to the Auditor's Opinion

Qualified Opinion

7.                   The auditor shall express a qualified opinion when:

(a)                The auditor, having obtained sufficient appropriate audit evidence, concludes that misstatements, individually or in the aggregate, are material, but not pervasive, to the financial report; or

(b)                The auditor is unable to obtain sufficient appropriate audit evidence on which to base the opinion, but the auditor concludes that the possible effects on the financial report of undetected misstatements, if any, could be material but not pervasive.

Adverse Opinion

8.                   The auditor shall express an adverse opinion when the auditor, having obtained sufficient appropriate audit evidence, concludes that misstatements, individually or in the aggregate, are both material and pervasive to the financial report.

Disclaimer of Opinion

9.                   The auditor shall disclaim an opinion when the auditor is unable to obtain sufficient appropriate audit evidence on which to base the opinion, and the auditor concludes that the possible effects on the financial report of undetected misstatements, if any, could be both material and pervasive.

10.               The auditor shall disclaim an opinion when, in extremely rare circumstances involving multiple uncertainties, the auditor concludes that, notwithstanding having obtained sufficient appropriate audit evidence regarding each of the individual uncertainties, it is not possible to form an opinion on the financial report due to the potential interaction of the uncertainties and their possible cumulative effect on the financial report.

Consequence of an Inability to Obtain Sufficient Appropriate Audit Evidence Due to a Management‑Imposed Limitation after the Auditor Has Accepted the Engagement

11.               If, after accepting the engagement, the auditor becomes aware that management has imposed a limitation on the scope of the audit that the auditor considers likely to result in the need to express a qualified opinion or to disclaim an opinion on the financial report, the auditor shall request that management remove the limitation.

12.               If management refuses to remove the limitation referred to in paragraph 11 of this Auditing Standard,