Audit Opinion & Audit Report
Examiner’s comments
Questions historically in this area of the syllabus have required a discussion of the accounting
treatment, a materiality calculation, an assessment of the type of audit report modification and the
impact on the auditor’s report.
Candidates often find auditor’s reports a challenging part of the syllabus and in preparation for
exams, it is imperative that candidates can:
- describe the different elements of the auditor’s report
- determine the most appropriate type of audit opinion in a given scenario, often through an
explanation of why a certain opinion is appropriate which will test the application of the
candidate’s knowledge
- understand the issues that may arise during the course of an audit that could require an Emphasis
of Matter or Other Matter paragraph to be included in the audit report, and
- identify Key Audit Matters (KAM) that are required to be disclosed in an auditor’s report.
Candidates will not be expected to draft an auditor’s report but may be asked to present reasons for
an unmodified or a modified opinion, or the inclusion of an Emphasis of Matter paragraph.
Candidates attempting the exam may be required to identify and describe the elements of the
auditor’s report and therefore candidates should ensure that they have a sound understanding of the
revised ISA 700, Forming an Opinion and Reporting on Financial Statements.
Candidates may also be presented with extracts from an auditor’s report and be asked to critically
appraise the extracts, or challenge the proposed audit opinion.
An Exam focused overview
Page | 141
,w
Page | 142
, Page | 143
Examiner’s comments
Questions historically in this area of the syllabus have required a discussion of the accounting
treatment, a materiality calculation, an assessment of the type of audit report modification and the
impact on the auditor’s report.
Candidates often find auditor’s reports a challenging part of the syllabus and in preparation for
exams, it is imperative that candidates can:
- describe the different elements of the auditor’s report
- determine the most appropriate type of audit opinion in a given scenario, often through an
explanation of why a certain opinion is appropriate which will test the application of the
candidate’s knowledge
- understand the issues that may arise during the course of an audit that could require an Emphasis
of Matter or Other Matter paragraph to be included in the audit report, and
- identify Key Audit Matters (KAM) that are required to be disclosed in an auditor’s report.
Candidates will not be expected to draft an auditor’s report but may be asked to present reasons for
an unmodified or a modified opinion, or the inclusion of an Emphasis of Matter paragraph.
Candidates attempting the exam may be required to identify and describe the elements of the
auditor’s report and therefore candidates should ensure that they have a sound understanding of the
revised ISA 700, Forming an Opinion and Reporting on Financial Statements.
Candidates may also be presented with extracts from an auditor’s report and be asked to critically
appraise the extracts, or challenge the proposed audit opinion.
An Exam focused overview
Page | 141
,w
Page | 142
, Page | 143
