Document ID: chunk:federal_register_of_legislation:F2023C01138:reg:4:p38
Version: federal_register_of_legislation:F2023C01138
Segment Type: reg
Provision Reference: reg 4 (pt 38/43)
Character Range: 109182–112092

in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements including material accounting policy information and other explanatory information, and the directors' declaration.

In our opinion, because of the significance of the matter discussed in the Basis for Adverse Opinion section of our report, the accompanying financial report of the Group is not in accordance with the Corporations Act 2001, including:

    (a)                giving a true and fair view of the Group's financial position as at 30 June 20X1 and of its financial performance for the year then ended; and

    (b)                complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for Adverse Opinion

As explained in Note X, the Group has not consolidated subsidiary XYZ Company that the Group acquired during 20X1 because it has not yet been able to determine the fair values of certain of the subsidiary's material assets and liabilities at the acquisition date.  This investment is therefore accounted for on a cost basis.  Under Australian Accounting Standards, the Group should have consolidated this subsidiary and accounted for the acquisition based on provisional amounts.  Had XYZ Company been consolidated, many elements in the accompanying financial report would have been materially affected.  The effects on the financial report of the failure to consolidate have not been determined.

We conducted our audit in accordance with Australian Auditing Standards.  Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of our report.  We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia.  We have also fulfilled our other ethical responsibilities in accordance with the Code.

We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors the Company, would be in the same terms if given to the directors as at the time of this auditor's report.[*]

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our adverse opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period.  These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.  In addition to the matter described in the Basis for