Page 233 - Internal Auditing Standards

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

Component Comments
Auditor’s States that the responsibility of the auditor is to express an opinion on the fi nancial
Responsibility statements based on the audit. This includes:
• Stating that the audit was conducted in accordance with International
Standards on Auditing. The auditor’s report should also explain that those
standards require that the auditor comply with ethical requirements, and that
the auditor plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement.

• Describing an audit by stating:
− An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the fi nancial statements,
− The procedures selected depend on the auditor’s judgment, including
the assessment of the risks of material misstatement of the fi nancial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
entity’s preparation of the financial statements in order to design audit

procedures that are appropriate in the circumstances, but not for the

purpose of expressing an opinion on the effectiveness of the entity’s
internal control, and
− An audit also includes evaluating the appropriateness of the accounting
policies used, the reasonableness of accounting estimates made by
management, as well as the overall presentation of the fi nancial statements.
• Stating that the auditor believes that the audit evidence the auditor has obtained
is sufficient and appropriate to provide a basis for the auditor’s opinion.

• Where financial statements are prepared in accordance with a fair presentation
framework, the description of the audit shall refer to “the entity’s preparation and

fair presentation of the financial statements” or “the entity’s preparation of fi nancial
statements that give a true and fair view,” as appropriate in the circumstances.
Auditor’s Opinion Fair Presentation Frameworks

States whether the financial statements present fairly, in all material respects, (or
give a true and fair view of) in accordance with the applicable fi nancial reporting
framework, or such similar wording as required by law or regulation.
Compliance Frameworks
States whether the financial statements are prepared in all material respects in

accordance with the applicable financial reporting framework.

When International Financial Reporting Standards are not used as the fi nancial
reporting framework, the wording of the opinion should identify the jurisdiction or

country of origin of the financial reporting framework (e.g., … in accordance with
accounting principles generally accepted in country X …).
Other Reporting Certain standards, laws, or generally accepted practice in a jurisdiction may require
Responsibilities or permit the auditor to report on other responsibilities. Such matters would be
addressed in a separate paragraph following the auditor’s opinion.

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