Document ID: chunk:federal_register_of_legislation:F2023C01137:body:0:p9
Version: federal_register_of_legislation:F2023C01137
Segment Type: other
Provision Reference: 
Character Range: 23749–27056

to the opinion, and the effects thereof.  (Ref: Para. A24)

Description of Auditor's Responsibilities for the Audit of the Financial Report When the Auditor Disclaims an Opinion on the Financial Report

28.               When the auditor disclaims an opinion on the financial report due to an inability to obtain sufficient appropriate audit evidence, the auditor shall amend the description of the auditor's responsibilities required by paragraphs 38‑40 of ASA 700 to include only the following: (Ref: Para. A25)

(a)                A statement that the auditor's responsibility is to conduct an audit of the entity's financial report in accordance with Australian Auditing Standards  and to issue an auditor's report;

(b)                A statement that, however, because of the matter(s) described in the Basis for Disclaimer of Opinion section, the auditor was not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on the financial report; and

(c)                The statement about auditor independence and other ethical responsibilities required by paragraph 28(c) of ASA 700.

Considerations When the Auditor Disclaims an Opinion on the Financial Report

29.               Unless required by law or regulation, when the auditor disclaims an opinion on the financial report, the auditor's report shall not include a Key Audit Matters section in accordance with ASA 701[4] or an Other Information section in accordance with ASA 720.[5] (Ref: Para. A26)

Communication with Those Charged with Governance

30.               When the auditor expects to modify the opinion in the auditor's report, the auditor shall communicate with those charged with governance the circumstances that led to the expected modification and the wording of the modification.  (Ref: Para. A27)

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Application and Other Explanatory Material

Types of Modified Opinions (Ref: Para. 2)

A1.             The table below illustrates how the auditor's judgement about the nature of the matter giving rise to the modification, and the pervasiveness of its effects or possible effects on the financial report, affects the type of opinion to be expressed.

Nature of Matter Giving Rise to the Modification           Auditor's Judgement about the Pervasiveness of the Effects or Possible Effects on the Financial Report

Material but Not Pervasive                                 Material and Pervasive

The financial report is materially misstated               Qualified opinion                                                                                       Adverse opinion

Inability to obtain sufficient appropriate audit evidence  Qualified opinion                                                                                       Disclaimer of opinion

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

Nature of Material Misstatements (Ref: Para. 6(a))

A2.             ASA 700 requires the auditor, in order to form an opinion on the financial report, to conclude as to whether reasonable assurance has been obtained about whether the financial report as a whole is free from material misstatement.[6]  This conclusion takes into account the auditor's evaluation of uncorrected misstatements, if any, on the financial report in accordance