Sie sind auf Seite 1von 39

Audit Reports

3-1

Parts of the Standard Unqualified Audit Report


1. Report title 2. Addressee 3. Introductory paragraph 4. Scope paragraph 5. Opinion paragraph 6. Name & signature of auditor firm 7. Audit report date
3-2

Report of the Auditors to the Members of ABC BERHAD (Company No: 12345-X) We have audited the financial statements set out on pages 10 to 55. These financial statements are the responsibility of the Companys directors.

It is our responsibility to form an independent opinion, based on our audit, on the financial statements and to report our opinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose. We do not assume responsibility to any other person for the contents of this report.
We conducted our audit in accordance with applicable Approved Standards on Auditing in Malaysia. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
3-3

In our opinion: a) the financial statements have been properly drawn up in accordance with the provisions of the Companies Act, 1965 and applicable MASB Approved Accounting Standards in Malaysia so as to give a true and fair view of: i) the financial position of the Group and of the Company at 31 December 2005 and of the results and the cash flows of the Group and of the Company for the year then ended; and ii) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements; and b) the accounting and other records and the registers required by the Act to be kept by the Company and by its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

3-4

We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes. The auditors report on the financial statements of the subsidiaries were not subject to any qualification material to the consolidated financial statements and did not include any comment required to be made under Section 174(3) of the Act. AUDIT FIRM AUDIT PARTNER DATE
3-5

Four Categories of Audit Reports


Modified unqualified report Emphasis of matter

Standard unqualified

Qualified

Adverse or disclaimer

3-6

Modified Unqualified Report (with Explanation)


1. Going concern uncertainty 2. Significant uncertainty due to pending litigation 3. Non-compliance with approved accounting standards but auditor agrees 4. Emphasis of matter

3-7

Going Concern Uncertainty


1. Significant recurring operating losses or working capital deficiencies 2. Inability of the company to pay its obligations as they come due 3. Loss of major customers, the occurrence of uninsured catastrophes 4. Legal proceedings, legislation, that might jeopardize the entitys ability to operate
3-8

Going Concern Uncertainty Disclosure


- Identify principal conditions that caused the going concern uncertainty
- Describe managements plans - State that there is a material uncertainty relating to going concern conditions, & entity may not be able to realise its assets/discharge its liabilities in the normal course of business
3-9

Going Concern Uncertainty Disclosure example


After opinion paragraph.

Without qualifying our opinion, we draw attention to Note X in the financial statements which indicates that the company incurred a net loss of RMXXX during the year ended 31.12.2005 and as of that date, the companys current liabilities exceeded its total assets by RMXXX. These conditions, along with other matters set forth in Note X indicate the existence of a material uncertainty which may cast significant doubt about the companys ability to continue as a going concern.
3 - 10

Significant uncertainty due to pending litigation


After opinion paragraph.

Without qualifying our opinion, we draw attention to Note X to the financial statements. The company is the defendant in a lawsuit alleging infringement of certain patent rights and claiming royalties and punitive damages. The company has filed a counter claim, and preliminary hearings and discovery proceedings on both actions are in progress. The ultimate outcome of the matter cannot presently be determined, and no provision for any liability that may esult has been made in the financial statements.
3 - 11

Auditor agrees with non-compliance with approved accounting standards


S.166A(4) of CA65 directors need not comply with a standard if they think that the true & fair view would be affected Directors should:

(a) disclose this non-compliance in a Note (b) disclose the financial effect of noncompliance in a Note
3 - 12

Auditor agrees with non-compliance with approved accounting standards


Auditors report. Auditors should state:
(a) If standard was complied with, will the FS be true & fair? (No)

(b) If No, to give the reasons for his opinion (c) If the directors have disclosed the particulars of the financial effect of non-compliance, to give his opinion
(d) If the directors have not disclose (c), to disclose the quantified financial effect of the non-compliance
3 - 13

Emphasis of a Matter
Under certain circumstances, the auditor may want to emphasize specific matters regarding the financial statements, even though the auditor intends to express an unqualified opinion.

3 - 14

Departures from an Unqualified Opinion


1. Scope limitation

2. Departure from accounting standards

3 - 15

Qualified Opinion

A qualified opinion report can result from a limitation on the scope of the audit or failure to follow generally accepted accounting principles.

3 - 16

Disclaimer of Opinion
It is issued when the auditor is unable to be satisfied that the overall financial statements are fairly presented.

3 - 17

Adverse Opinion

It is used only when the auditor believes that the overall financial statements are so materially misstated or misleading that they do not present fairly the financial position or results of operations and cash flows in conformity with accounting standards.

3 - 18

Materiality

A misstatement in the financial statements can be considered material if knowledge of the misstatement would affect a decision of a reasonable user of the statements.

3 - 19

Levels of Materiality
Amounts are immaterial. Amounts are material but do not overshadow the financial statements as a whole.
Amounts are so material or so pervasive that overall fairness of the statements is in question.
3 - 20

Relationship of Materiality to Type of Opinion


Materiality Significance in Terms of Level Reasonable Users Decisions Type of Opinion

Users decisions are unlikely Immaterial Unqualified to be affected.

Material Highly material

Users decisions are likely to be affected. Users decisions are likely to be significantly affected.

Qualified Disclaimer or adverse


3 - 21

Materiality Decisions
Scope limitation
Audit report

Unqualified

Qualified scope and opinion

Disclaimer
3 - 22

Scope Limitation Qualified opinion


Introductory paragraph
Except as discussed in the following paragraph, we conducted our audit in accordance with ... (scope paragraph)

We did not observe the counting of the physical inventories as of 31 December 2005, since that date was prior to the time we were initially engaged as auditors for the Company. Owing to the nature of the Companys records, we were unable to satisfy ourselves as to inventory quantities by other audit procedures. In our opinion, except for the effects of such adjustments, if any, as might have been determined to be necessary had we been able to satisfy ourselves as to physical inventory quantities, the financial statements give a true and ... (opinion paragraph).
3 - 23

Scope Limitation Disclaimer


We were engaged to audit the accompanying balance sheet of the ABC Company as of 31 December 2005, and the related statements of income and cash flows for the year then ended. These financial statements are the responsibility of the Companys management. (Omit the sentence stating the responsibility of the auditor). (The paragraph discussing the scope of the audit would either be omitted or amended according to the circumstances.) (Add a paragraph discussing the scope limitation as follows:) We were not able to observe all physical inventories and confirm accounts receivable due to limitations placed on the scope of our work by the Company. Because of the significance of the matters discussed in the preceding paragraph, we do not express an opinion on the financial statements.

3 - 24

Materiality Decisions
Non-compliance with accounting standards
Audit report

Unqualified

Qualified opinion only

Adverse
3 - 25

Disagreement - Qualified opinion


We have audited ... (introductory paragraph). We conducted our audit in accordance with ... (scope paragraph). As discussed in Note X to the financial statements, no depreciation has been provided in the financial statements which practice, in our opinion, is not in accordance with the Malaysian Financial Reporting Standards. The provision for the year ended 31 December 2005, should be xxx based on the straight-line method of depreciation using annual rates of 5% for the building and 20% for the equipment. Accordingly, the fixed assets should be reduced by accumulated depreciation of xxx and the loss for the year and accumulated deficit should be increased by xxx and xxx, respectively. In our opinion, except for the effect on the financial statements of the matter referred to in the preceding paragraph, the financial statements give a true and ... (opinion paragraph). 3 - 26

Disagreement Adverse
We have audited ... (introductory paragraph). We conducted our audit in accordance with ... (scope paragraph). (Paragraph(s) discussing the disagreement). In our opinion, because of the effects of the matters discussed in the preceding paragraph(s), the financial statements do not give a true and fair view of (or do not present fairly) the financial position of the Company as of 31 December 2005, and of the results of its operations and its cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards and do not comply with ....

3 - 27

Auditors Decision Process


Determine whether any condition exists requiring a departure from a standard unqualified report.

Decide the materiality for each condition. Decide the appropriate type of report.
Write the audit report.
3 - 28

Scope limitation
Level of Materiality

Immaterial

Material

Extremely Material

Qualified scope, additional Unqualified Disclaimer paragraph, and qualified report of opinion opinion (except for)

3 - 29

Non-compliance with accounting standards


Level of Materiality

Immaterial
Unqualified report

Material
Additional paragraph and qualified opinion (except for)

Extremely Material
Adverse opinion

3 - 30

Other information in documents containing the audited FS (ISA 720)


Material inconsistency - When other information differs/contradicts the audited FS - E.g. Per audited FS, sales increase by 10%, but per Chairmans statement, sales increase by only 5% Need to revise either the FS or the other information.

Material misstatement of fact - inaccuracy/misstatement in other information - E.g. Chairmans name is wrong Need to read other info to identify inconsistencies because it may indicate a inconsistency in the audited FS
3 - 31

Other information in documents containing the audited FS (ISA 720)


Effect on auditors report - If FS require amendment + entity refuses to amend disagreement qualified/adverse opinion - If FS is correct & other information is wrong + entity refuses to amend emphasis of matter paragraph describing the material inconsistency, maybe legal advice - Material misstatement of fact discuss with management if mgt refuses to amend notify top management/directors or obtain legal advice

3 - 32

Facts discovered after the date of the auditors report (ISA 560 Subsequent Events)
Facts discovered before the FS are issued - If FS are amended issue a new auditors report (new date) ensure subsequent events review performed up to date of new auditors report - If management refuses to amend the FS notify the directors not to issue the FS but if FS were subsequently released take action to prevent reliance of auditors report (notify client, regulatory agencies (CCM, SC), other relevant person/s Facts discovered after the FS have been issued - Request that client issue an immediate revision to the FS then issue new auditors report with emphasis of matter paragraph, stating reason for the revised FS should also ensure that client informs relevant FS users (regulatory authorities, etc)

3 - 33

Facts discovered after the date of the auditors report (ISA 560 Subsequent Events)
Facts discovered after the FS have been issued (Contd.) - If client refuses to co-operate notify the BOD & take steps to prevent reliance on auditors report by notifying FS users should also disclose the effect of the info on auditors report.

3 - 34

Private Exempt Auditors Certificate


- Annual reports submitted together with annual audited FS - But a private exempt company (PEC) can attach an auditors statement instead of the FS, provided that the current liabilities do not exceed current assets. - Refer Exhibit 18-11 (Page 541)

3 - 35

Reporting non-compliance with laws & regulations & breaches of CA65


- Report to management/directors - If it has a material effect on the FS qualified/adverse opinion - If scope limitation was imposed qualified/disclaimer opinion - Confidentiality ineffective if reporting is required by law - Must report on all breaches of CA65 to CCM if the matter cannot be dealt with in the auditors report or by notifying the directors 3 - 36

Special Purpose Audits


FS prepared on other comprehensive basis of accounting - Income tax basis, cash/modified cash basis, regulatory basis, price-level adjusted - Auditors report disclose basis of accounting, ensure that FS are approximately titled, limitation on distribution

3 - 37

Special Purpose Audits


Reporting on a component of FS - e.g. revenue, fixed assets - Usually more extensive than normal audit on the overall FS - Auditors report scope refers to component being audited, opinion refers to component, limitation on distribution of report - If a disclaimer/adverse opinion has been issued on the entire FS, auditor cannot report on components of FS 3 - 38

Special Purpose Audits


Reporting on summarised FS - Less detailed than annual audited FS - Should not report on summarised FS unless auditor has reported on the full FS - Auditors report (a) cannot use true & fair (b) identify the audited FS from which the summarised FS were derived (c) refer to the auditors report date on the full FS & the type of audit opinion given (d) opinion of whether the financial info in the summarised FS is consistent with the full FS (e) a statement that for a better understanding of the financial performance, to read the full FS

3 - 39

Das könnte Ihnen auch gefallen