SA 700 SERIES
AUDIT REPORT
Presented By:
Swetha V
Dharunesh S
Responsibility of the Auditor: The auditor
must obtain sufficient appropriate audit
evidence to form an opinion on the financial
statements.
SA 700
FORMING AN OPINION
AND REPORTING ON Opinion Formation: The auditor must
FINANCIAL express an opinion on whether the financial
STATEMENTS statements are presented fairly, in all
material respects, in accordance with the
applicable financial reporting framework.
Title
Addressee
Auditors’ Opinion
Basis for Opinion (to be given even for unmodified opinion)
Going Concern (SA-570)
STRUCTURE
Key Audit Matter (SA-701)
Emphasis of Matter (SA-706)
OF AUDITOR’S Management Responsibility for Financial Statements
REPORT Auditors’ Responsibilities for the audit of financial
statements
Other Information (SA720)
Reporting on other legal and regulatory matters (SA-706)
Signature
Place and Date of Signing
TITLE & ADDRESSEE OF REPORT
OPINION AND BASIS OF OPINION
GOING CONCERN
Adverse
Inappropriate
Opinion Unmodified
Opinion
Adequate
Disclosure Separate Section
made in FS “Material
Appropriate Uncertainity related
but a Material to Going Concern”
Going concern Uncertainity
basis Exists Qualified or
Adequate Adverse Opinion
Disclosure NOT
made in FS
Mention in Basis of
Opinion Paragraph
Mgmt. unwilling Consider
to make or extend implications on
its assessment Audit Report
RESPONSIBILITIES TO FINANCIAL
STATEMENTS
Management Auditor Other Reporting
State the Disclaimers
Includes Section
Preparing FS and with respect to the
143(3) and 143(11)
assessing of internal audit
of Companies Act,
controls
2013
Describe the work of
an auditor
Assessing the Titled “Report on
entity’s ability to Other Legal and
continue as a going Communication with Regulatory
concern TCWG Requirements”
SIGNATURE, PLACE & DATE
What are Key Audit Matters (KAM)?
Key Features of SA 701:
SA 701 Scope
COMMUNICATI Purpose
NG KEY AUDIT Disclosure
MATTERS • Description of the matter
• Why it was significant
• How the matter was addressed
Primarily issues that are reported to Those
Charged With Governance
Areas or matters that required significant
Auditor attention
Areas of higher risk of material
What needs to misstatement or any significant risk
be covered as identified as per SA315
KAM Areas requiring significant auditor and
management judgement including
accounting estimates
The effect on the audit of significant events
or transactions during the period
KAM is not a substitute to modification of
report
Material uncertainty relating to going
concern needs to be specifically reported in
KAM accordance with SA-570 and not made a Key
IMPORTANCE Audit matter for reporting under SA-701
Not a substitute for disclosure of a particular
matter in the financial statement
Not a separate opinion on individual matter
EXAMPLE OF KEY AUDIT MATTER
No KAM to be reported in the Audit Report of
Hindusthan Unilever Limited – FY 2022-23
SA 705 Financial statements are not free from
Material misstatement
MODIFICATION
TO AUDITOR’S Unable to obtain sufficient and appropriate
OPINION Audit evidence
A Qualified Opinion
TYPES OF
An Adverse Opinion
MODIFIED
OPINION A Disclaimer of Opinion
Having Sufficient and appropriate
audit evidence :
Misstatements are material but not
pervasive
QUALIFIED
OPINION Not having sufficient and appropriate
audit evidence :
Possible effects of undetected
misstatements could be material but not
pervasive
Having sufficient and appropriate audit
evidence :
ADVERSE Misstatements are both material and
OPINION pervasive
Misstatements can be either individual
or in aggregate
Unable to obtain sufficient and
DISCLAIMER appropriate audit evidence :
OF OPINION Possible effects of misstatements
could be both material and pervasive
Consequences
of inability to
obtain SAAE
Provide a description and quantification of
Misstatement.
If it is impracticable, Auditor shall state so in the
section
If misstatements relate to Narrative Disclosures,
Changes to be
provide an explanation how it is misstated
made in the BASIS If misstatements relate to non disclosure of
FOR OPINION
information,
paragraph Communicate with TCWG
Include the omitted disclosure unless
prohibited
EMPHASIS OF MATTER :
Matters presented or disclosed in the
financial statements
SA 706 To enhance user’s understanding of
the financial statements
OTHER MATTER PARAGRAPH :
Matters other than those
presented in the financial statements
SA 706 To enhance the user’s
understanding of the audit, Auditor’s
responsibilities and Auditor’s report
Auditor would not be required to modify the
opinion
Matter has not been determined to be a KAM
SA 706 EOM is not a substitute for reporting in
accordance with SA 570 ( Going concern)
Communicate with TCWG
SA 710 - COMPARATIVE Auditor’s Responsibilities: The auditor
INFORMATION - must consider whether the comparative
CORRESPONDING information is consistent with the current
FIGURES AND
COMPARATIVE period’s financial statements and ensure that
FINANCIAL it is appropriately disclosed and presented.
STATEMENTS
If the prior year's figures are restated,
revised, or adjusted
WHEN IS SA The auditor must also ensure that the
710 comparative information is in line with the
RELEVANT? current period’s presentation and
disclosures.
Corresponding figures :
• If previous AR is other than unqualified
• Prior period misstatement not addressed
• If prior period FS unaudited
Comparative figures :
AUDIT • Difference in opinion on previously issued FS
REPORTING • If previous FS audited by some other auditor,
mention the same in AR
• If prior period FS unaudited, mention the same in
the AR
Any material Inconsistency between other
SA 720 information And FS
Any material Inconsistency between other
OTHER
information and Auditor’s knowledge
INFORMATIO obtained in audit
N PARA Report accordingly
Try obtaining such other info. From
OBTAINING management prior to the date of audit report
OTHER If not possible, obtain a written
INFORMATIO representation fro. Management that it will
N be provided before it’s issuance
To request the management to correct it.
If management refuses, communicate the
MATERIAL matter to TCWG
MISSTATEME If it is still uncorrected,
NT IN OTHER Take appropriate action, by stating so
INFO. in the other matter paragraph of audit
report.
MATERIAL
To repost accordingly as per SA 705
MISSTATEMENT
IN FS
This section shall include:
A statement that management is
responsible for other matter paragraph.
A statement that Auditor’s opinion does
REPORTING IN not cover other information ( just read and
OTHER report accordingly)
INFORMATIO A Statement that auditor has nothing to
N PARA report ( If there is no material Inconsistency)
If there is A uncorrected misstatement
in other matter paragraph, a description of
such misstatement.
