Auditor’s report

To the SHAREHOLDERS (ONLY) of the company

Opinion
The opinion paragraph should include reference to all the financial statements that were
audited in the period-SOFP, SOPL, SOCIE, SOCF and notes, including the year end.
The auditor should further state either the financial statements “present fairly” OR “give a
true and fair view”, in all material respects…..
If the opinion is qualified, the auditor should state that except for the possible effects of the
matter described in the basis for qualified opinion section of the report, the financial
statements present fairly…..
If the opinion is adverse, the auditor should state that because of the significance of matter
discussed in the Basis for Adverse Opinion the financial statements do not present fairly or
give a true and fair view.
If the auditor disclaims the opinion, the auditor should state that they do not express an
opinion because of the significance of the matter described in the basis.
Lastly, it should provide reference to the accounting standards used for the preparation of the
financial statements for the year (In case of a disclaimer this is not required).
Basis for opinion
If the audit opinion is modified, the auditor will explain the reason for modifying the report
(“qualified except for…”, adverse or disclaimer).
The report should state the professional standards that were used in the audit of the financial
statements, and further referencing that their responsibilities under those standards is
described in the “Auditor’s Responsibilities for the Audit of the Financial Statements”. (The
auditor will start with this paragraph if the opinion is unmodified).
The auditor should then state about their independence by referencing to the IESBA code of
ethics and conduct, and that the responsibilities are fulfilled under that code.
If the audit opinion is unmodified, the auditor will conclude that the audit evidence
obtained is sufficient and appropriate.
Key Audit Matters (Only for listed clients)
The auditor should explain what is a key audit matter and that it was addressed in the context
of the audit of the FS as a whole, and in forming the opinion. It should specifically state the
fact that an auditor does not provide a separate opinion on these matters.
After the matters have been identified by the auditor as a KAM, the auditor should further go
on to explain why the particular matter was considered to be a KAM.
This paragraph should further discuss the work performed by the auditors in relation to the
matters being discussed, for example, by explaining the procedures conducted on a specific
area.
The auditor should always provide reference of the key audit matter being discussed to the
financial statements (For example, Please refer Note 5 of the annual financial statements).
Other Information
State the fact that it is the responsibility of the management to prepare other information
and state what the other information comprises of.
It should be specifically stated that the auditor’s opinion on the FS does not cover other
information and no assurance conclusion is provided thereon.
The auditors should then state their responsibility of reading the other information and, in
doing so, whether it is its materially inconsistent with the FS OR with the knowledge
obtained in the audit OR otherwise materially misstated.
Responsibilities of the management and TCWG
Under this paragraph, the auditors should state that management is responsible for the
preparation and fair presentation of the FS in accordance with the relevant accounting
standard and for the internal controls used in the preparation of the FS that are free from
material misstatement, whether due to fraud or error.
The auditor further states that management is responsible for assessing the going concern
status of the company, disclosing matters related to going concern and using the going
concern basis of accounting appropriately.
The auditor then states that the responsibility of TCWG is overseeing the company’s
financial reporting process.
Responsibilities of the auditor
The auditor should explain its objectives of obtaining reasonable assurance about whether
the financial statements as a whole are free from material misstatement, whether due to
fraud or error. The paragraph should also clear the fact that reasonable assurance is NOT a
high level of assurance and hence, not all material misstatements can be identified. The
paragraph should then explain the meaning of materiality.
The auditor should refer to the fact that professional judgment and professional scepticism
is maintained by the auditors through the audit in accordance with the ISAs.
Further the auditor should discuss:
 The auditor identifies and assesses the risks of material misstatement of the
financial statements, whether due to fraud or error and obtains audit evidence that
is sufficient and appropriate to provide a basis for the opinion. They note that the
risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error.
 The auditor obtains an understanding of internal control relevant to the audit to
design appropriate audit procedures. This is done solely for planning and not for the
 purpose of expressing an opinion on the effectiveness of the Company's internal
control.
 The auditor evaluates the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made by
management. This ensures that the financial statements fairly reflect the company’s
performance.
 The auditor concludes on the appropriateness of management's use of the going
concern basis of accounting by checking for any material uncertainty regarding the
company's ability to continue. If such uncertainty exists, it is highlighted in the
auditor’s report or leads to a modified opinion.
 The auditor evaluates the overall presentation, structure and content of the
financial statements, including disclosures, to ensure they accurately represent the
underlying transactions and events. This confirms that the financial statements
achieve fair presentation.
The auditor further discusses that states that key audit matters are selected from the matters
communicated with TCWG and that were significant. These matters are discussed in the
report unless the law or regulations prevents public disclosure, or in extremely rare
circumstances, it is not disclosed if it results in adverse consequences (Ex: tipping off).
Report on other legal and regulatory requirements
The form and content of this section varies depending on the nature of the auditor’s other
reporting responsibilities prescribed by local, law, regulation, or national auditing standards
The engagement partner on the audit resulting in this independent auditor’s report is
[Name]
[Auditor address]
[Date]

Other paragraphs that modify an auditor’s report:

Material Uncertainty Related to Going Concern

This paragraph is included immediately after the Basis for Opinion section.
This paragraph is included when there is a material uncertainty related to going concern
but the use of the going concern assumption is still appropriate, as long as the disclosure
made by the management is adequate as per the auditor.
If the disclosure is not adequate or no disclosure at all, this paragraph is irrelevant and
instead the opinion should be modified.
Emphasis of Matter (Only for non-listed clients)
This paragraph is included immediately after the after the Basis for Opinion section.
This paragraph is included in the auditor’s report when the auditor may determine it may be
necessary to draw user’s attention to issues that are adequately DISCLOSED within the
financial statements (Ex: A new auditor’s report is issued). (mostly used to refer to
disclosure made regarding a specific matter in the FS).
Other matter
This matter is included after the basis for opinion paragraph, after any EOMP, and after
KAM.
This paragraph is used to highlight the fact that the last year’s audit was performed by
another auditor and provide information about their opinion.
This paragraph is used when the auditor wants to communicate something important that is
NOT in the FS. (Ex: Disclosure or comment required by laws, regulations or local
GAAP).
Note: OMP must not refer to KAMs as they are beyond the scope of the FS.