Guide to Using International Standards on Auditing in - IFAC

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228 <strong>Guide</strong> <strong>to</strong> <strong>Using</strong> <strong>International</strong> <strong>Standards</strong> on Auditing in the Audits of Small- and Medium-Sized Entities Volume 1—Core Concepts Paragraph # Relevant Extracts from ISAs 700.40 The audi<strong>to</strong>r’s report shall be signed. (Ref: Para. A37) 700.41 The audi<strong>to</strong>r’s report shall be dated no earlier than the date on which the audi<strong>to</strong>r has obtained sufficient appropriate audit evidence on which <strong>to</strong> base the audi<strong>to</strong>r’s opinion on the financial statements, including evidence that: (Ref: Para. A38-A41) (a) All the statements that comprise the financial statements, including the related notes, have been prepared; and (b) Those with the recognized authority have asserted that they have taken responsibility for those financial statements. 700.42 The audi<strong>to</strong>r’s report shall name the location in the jurisdiction where the audi<strong>to</strong>r practices. 700.43 If the audi<strong>to</strong>r is required by law or regulation of a specific jurisdiction <strong>to</strong> use a specific layout or wording of the audi<strong>to</strong>r’s report, the audi<strong>to</strong>r’s report shall refer <strong>to</strong> <strong>International</strong> <strong>Standards</strong> on Auditing only if the audi<strong>to</strong>r’s report includes, at a minimum, each of the following elements: (Ref: Para. A42) (a) A title; (b) An addressee, as required by the circumstances of the engagement; (c) An introduc<strong>to</strong>ry paragraph that identifies the financial statements audited; (d) A description of the responsibility of management (or other appropriate term, see paragraph 24) for the preparation of the financial statements; (e) A description of the audi<strong>to</strong>r’s responsibility <strong>to</strong> express an opinion on the financial statements and the scope of the audit, that includes: • A reference <strong>to</strong> <strong>International</strong> <strong>Standards</strong> on Auditing and the law or regulation; and • A description of an audit in accordance with those standards; (f) An opinion paragraph containing an expression of opinion on the financial statements and a reference <strong>to</strong> the applicable financial reporting framework used <strong>to</strong> prepare the financial statements (including identifying the jurisdiction of origin of the financial reporting framework that is not <strong>International</strong> Financial Reporting <strong>Standards</strong> or <strong>International</strong> Public Sec<strong>to</strong>r Accounting <strong>Standards</strong>, see paragraph 37); (g) The audi<strong>to</strong>r’s signature; (h) The date of the audi<strong>to</strong>r’s report; and (i) The audi<strong>to</strong>r’s address. 700.44 An audi<strong>to</strong>r may be required <strong>to</strong> conduct an audit in accordance with the auditing standards of a specific jurisdiction (the “national auditing standards”), but may additionally have complied with the ISAs in the conduct of the audit. If this is the case, the audi<strong>to</strong>r’s report may refer <strong>to</strong> <strong>International</strong> <strong>Standards</strong> on Auditing in addition <strong>to</strong> the national auditing standards, but the audi<strong>to</strong>r shall do so only if: (Ref: Para. A43-A44) (a) There is no conflict between the requirements in the national auditing standards and those in ISAs that would lead the audi<strong>to</strong>r (i) <strong>to</strong> form a different opinion, or (ii) not <strong>to</strong> include an Emphasis of Matter paragraph that, in the particular circumstances, is required by ISAs; and (b) The audi<strong>to</strong>r’s report includes, at a minimum, each of the elements set out in paragraph 43(a) (i) when the audi<strong>to</strong>r uses the layout or wording specified by the national auditing standards. Reference <strong>to</strong> law or regulation in paragraph 43(e) shall be read as reference <strong>to</strong> the national auditing standards. The audi<strong>to</strong>r’s report shall thereby identify such national auditing standards. 700.45 When the audi<strong>to</strong>r’s report refers <strong>to</strong> both the national auditing standards and <strong>International</strong> <strong>Standards</strong> on Auditing, the audi<strong>to</strong>r’s report shall identify the jurisdiction of origin of the national auditing standards.
229 <strong>Guide</strong> <strong>to</strong> <strong>Using</strong> <strong>International</strong> <strong>Standards</strong> on Auditing in the Audits of Small- and Medium-Sized Entities Volume 1—Core Concepts Paragraph # Relevant Extracts from ISAs 700.46 If supplementary information that is not required by the applicable financial reporting framework is presented with the audited financial statements, the audi<strong>to</strong>r shall evaluate whether such supplementary information is clearly differentiated from the audited financial statements. If such supplementary information is not clearly differentiated from the audited financial statements, the audi<strong>to</strong>r shall ask management <strong>to</strong> change how the unaudited supplementary information is presented. If management refuses <strong>to</strong> do so, the audi<strong>to</strong>r shall explain in the audi<strong>to</strong>r’s report that such supplementary information has not been audited. 700.47 Supplementary information that is not required by the applicable financial reporting framework but is nevertheless an integral part of the financial statements because it cannot be clearly differentiated from the audited financial statements due <strong>to</strong> its nature and how it is presented shall be covered by the audi<strong>to</strong>r’s opinion. The audi<strong>to</strong>r’s report communicates the following information <strong>to</strong> the reader: • Responsibilities of management; • Responsibilities of the audi<strong>to</strong>r and a description of the audit; • The audit was conducted in accordance with <strong>International</strong> <strong>Standards</strong> on Auditing; • The financial reporting framework used; and • The audi<strong>to</strong>r’s opinion on the financial statements. The form of the audi<strong>to</strong>r’s report will be affected by the financial reporting framework used, any additional requirements required by law or regulation, and the inclusion of any supplementary information. The audi<strong>to</strong>r’s report is entitled the “Independent Audi<strong>to</strong>r’s Report,” and headings are required for each paragraph as follows: • Report on the Financial Statements; • Management’s Responsibility for the Financial Statements; • Audi<strong>to</strong>r’s Responsibility; and • Opinion. Other headings for paragraphs that may be used where applicable are: • Emphasis of Matter; and • Report on Other Legal and Regula<strong>to</strong>ry Requirements. The main components of the audi<strong>to</strong>r’s report (which have <strong>to</strong> be in writing) are outlined in the following exhibit.
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