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Reporting

Disclaimer of opinion

A disclaimer of opinion is issued when the auditor has not obtained sufficient
appropriate evidence and the effects of any possible misstatements could be
pervasive. The auditor does not express an opinion on the financial statements
in this situation.

Examples include:

 Failure by the client to keep adequate accounting records.

 Refusal by the directors to provide written representation.

 Failure by the client to provide evidence over a single balance which represents
a substantial proportion of the assets or profits or over multiple balances in the
financial statements.

Impact of a disclaimer

 The statement that sufficient appropriate evidence has been obtained is not
included.

 The statement that the financial statements have been audited is changed to
‘we were engaged to perform the audit’.

 The statement regarding the audit being conducted in accordance with ISAs
and ethical responsibilities are moved to the Auditor Responsibilities section
rather than the Basis for Disclaimer of Opinion.

 INT Syllabus: The Key Audit Matters section is not included in the auditor’s
report as to do so would suggest the financial statements are more credible in
relation to those matters.

 UK Syllabus: A Key Audit Matters section will be included in the auditor’s report
even if a disclaimer of opinion is issued.

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