Document ID: chunk:federal_register_of_legislation:F2023C01137:body:0:p13
Version: federal_register_of_legislation:F2023C01137
Segment Type: other
Provision Reference: 
Character Range: 35489–38536

financial reporting framework.[9]

           * The expression of a disclaimer of opinion regarding the results of operations, and cash flows, where relevant, and an unmodified opinion regarding the financial position (see ASA 510[10]).  In this case, the auditor has not expressed a disclaimer of opinion on the financial report as a whole.

Form and Content of the Auditor's Report When the Opinion is Modified

Illustrative Auditor's Reports (Ref: Para. 16)

A17.         [Aus] Illustrations 1A and 2A in the Appendix contain auditor's reports with qualified and adverse opinions, respectively, as the financial reports are materially misstated.

A18.         [Aus] Illustration 3A in the Appendix contains an auditor's report with a qualified opinion as the auditor is unable to obtain sufficient appropriate audit evidence.  Illustration 4 contains a disclaimer of opinion due to an inability to obtain sufficient appropriate audit evidence about a single element of the financial report.  Illustration 5 contains a disclaimer of opinion due to an inability to obtain sufficient appropriate audit evidence about multiple elements of the financial report.  In each of the latter two cases, the possible effects on the financial report of the inability are both material and pervasive.  The Appendices to other Australian Auditing Standards that include reporting requirements, including ASA 570,[11] also include illustrations of auditor's reports with modified opinions.

Auditor's Opinion (Ref: Para. 16)

A19.         Amending this heading makes it clear to the user that the auditor's opinion is modified and indicates the type of modification.

Qualified Opinion (Ref: Para. 17)

A20.         When the auditor expresses a qualified opinion, it would not be appropriate to use phrases such as "with the foregoing explanation" or "subject to" in the Opinion section as these are not sufficiently clear or forceful.

Basis for Opinion (Ref: Para. 20, 21, 23, 27)

A21.         Consistency in the auditor's report helps to promote users' understanding and to identify unusual circumstances when they occur.  Accordingly, although uniformity in the wording of a modified opinion and in the description of the reasons for the modification may not be possible, consistency in both the form and content of the auditor's report is desirable.

A22.         An example of the financial effects of material misstatements that the auditor may describe within the Basis for Opinion section in the auditor's report is the quantification of the effects on income tax, income before taxes, net income and equity if inventory is overstated.

A23.         Disclosing the omitted information within the Basis for Opinion section would not be practicable if:

(a)                The disclosures have not been prepared by management or the disclosures are otherwise not readily available to the auditor; or

(b)                In the auditor's judgement, the disclosures would be unduly voluminous in relation to the auditor's report.

         Aus A23.1 Where