P7:Advanced Audit & Assurance (INT)

2 Section F: Reporting Designed to give you knowledge and application of: F1. Auditor’s reports F2. Reports to those charged with governance and management F3. Other reports

3  The factors to be taken into account when forming an audit opinion in a given situation and justify & draft an audit opinion that is consistent & appropriate with the results of audit procedures. [3] Learning Outcomes F1. Auditor’s reports

4  Reports to those charged with governance and management in a given situation. [3] Learning Outcomes F2. Reports to those charged with governance and management

5 Factors to be taken into account when forming an audit opinion in a given situation Basis of forming audit opinion Sufficiency & reliability of estimates & judgements made by management Information required by IFRS is adequately disclosed in FS Relevance, reliability & comparability of FS items Sufficiency & appropriateness of audit evidence Sufficiency of disclosure made in FS Information received in confidence from client Estimation involves judgement, based on the latest, most reliable information Accounting estimates need to be revised if changes occur

6 Justify & draft an audit opinion that is consistent & appropriate with the results of audit procedures AUDITOR’S REPORT Emphasis of matter paragraph  FS if true & fair  Discloses matter of importance Standard Unqualified report True & fair view Modified report Qualified opinion Disclaimer of opinion Adverse opinion  Inability to obtain SAAE  SAAE available, but misstatement in FS  Matter material but not pervasive to FS  Inability to obtain SAAE  Matter material as well as pervasive to FS  SAAE available, but misstatement in FS  Matter material as well as pervasive to FS SAAE: Sufficient appropriate audit evidence

7 Refer to Test Yourself 2 on (page 528) Refer to Test Yourself 3 on (page 528) Practice Question Refer to SEQ 3 on (page 531) Refer to SEQ 4 on (page 532) Refer to SEQ 5 on (page 532)

8 Reports to those charged with governance Auditor’s independence  Opinion on the FS in accordance with ISAs  Communication of particular matters required by law / regulations, by agreement with entity / by additional requirements applicable to engagement  Compliance with ethical requirements  Fees charged  Safeguards Communication to those charged with governance Auditor’s responsibilities in relation to FS audit Continued…

9 Significant findings from audit  Qualitative aspects of accounting practice  Significant difficulties encountered during audit  Significant matters discussed / subject to correspondence with management  FS disclosure  The way auditor proposes to address significant risks of material misstatement  Approach to internal control relevant to audit  Application of materiality in the context of an audit  Other planning matters Continued… Planned scope & timing of audit

10 Refer to Test Yourself 2 on (page 546) Practice Question Refer to SEQ 1 on (page 548)

11 RECAP  The factors to be taken into account when forming an audit opinion in a given situation and justify & draft an audit opinion that is consistent & appropriate with the results of audit procedures. [3]  Reports to those charged with governance and management in a given situation. [3]