Page 222 - Internal Auditing Standards

Guide to Using International Standards on Auditing in the Audits of Small- and Medium-Sized Entities Volume 1—Core Concepts

17.1 Overview

The final step in the audit process is to evaluate the audit evidence obtained, consider the impact of any

misstatements identified, form an audit opinion, and prepare an appropriately worded audit report.
This chapter addresses:
• Financial statements prepared in accordance with one or both of the two general purpose frameworks
designed to meet the common financial-information needs of a wide range of users;

• Forming an opinion on a complete set of general purpose financial statements. This is based on an

evaluation of the conclusions drawn from the audit evidence obtained; and
• Expressing clearly that opinion through a written report that also describes the basis for that opinion.

Chapters 23 and 24 of Volume 2 of this Guide deal with situations where a modified opinion, Emphasis of

Matter paragraph, or Other Matter paragraphs are required in the auditor’s report.

For audits conducted in accordance with ISAs, the wording of the unmodified auditor’s report will contain a
minimum number of elements. The wording will be standard, except where additional paragraphs are added
for an emphasis of a matter or other reporting matters.

Consistency in the auditor’s report helps:

• Promote credibility in the global marketplace by making more readily identifiable those audits that have
been conducted in accordance with globally recognized standards; and
• Promote the user’s understanding and helps to identify unusual circumstances (such as modifi cations to
the auditor’s report) when they occur.

In some jurisdictions, the laws or regulations governing the audit of financial statements may prescribe
different wording for the auditor’s opinion. However, the auditor’s responsibilities for forming the opinion

remain the same. Where the wording diff ers significantly from the standard international wording, the auditor

would consider the risk that users might misunderstand the assurance obtained. If such a risk exists, further
explanation could be added to the auditor’s report.

17.2 Financial Reporting Frameworks

The auditor’s opinion on the financial statements will be made in the context of an applicable “general
purpose” framework. This is a financial reporting framework designed to meet the common fi nancial

information needs of a wide range of users. Acceptable frameworks include:

• International Financial Reporting Standard for Small and Medium-sized Entities;
• International Financial Reporting Standards; and

• International Public Sector Accounting Standards.

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