Beruflich Dokumente
Kultur Dokumente
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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.
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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.
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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
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Standard unqualified
Qualified
Adverse or disclaimer
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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.
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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.
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(a) disclose this non-compliance in a Note (b) disclose the financial effect of noncompliance in a Note
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(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
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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.
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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.
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Disclaimer of Opinion
It is issued when the auditor is unable to be satisfied that the overall financial statements are fairly presented.
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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.
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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.
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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.
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Users decisions are likely to be affected. Users decisions are likely to be significantly affected.
Materiality Decisions
Scope limitation
Audit report
Unqualified
Disclaimer
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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).
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Materiality Decisions
Non-compliance with accounting standards
Audit report
Unqualified
Adverse
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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 ....
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Decide the materiality for each condition. Decide the appropriate type of report.
Write the audit report.
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Scope limitation
Level of Materiality
Immaterial
Material
Extremely Material
Qualified scope, additional Unqualified Disclaimer paragraph, and qualified report of opinion opinion (except for)
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Immaterial
Unqualified report
Material
Additional paragraph and qualified opinion (except for)
Extremely Material
Adverse opinion
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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
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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)
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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.
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