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Chapter 133 4

5.5 Basis for modified opinion

 When the auditor decides to modify the opinion, they must amend the heading
'Basis for Opinion' to 'Basis for Qualified Opinion', 'Basis for Adverse Opinion' or
'Basis for Disclaimer of Opinion', as appropriate.

 The section will explain the reason why the opinion is modified e.g. which
balances are misstated, which disclosures are missing or inadequate, which
balances the auditor was unable to obtain sufficient appropriate evidence over
and why.

 If possible, a quantification of the financial effect of the modification will be
included.

 If the material misstatement relates to narrative disclosures, an explanation of
how the disclosures are misstated should be included, or in the case of omitted
disclosures, the disclosure should be included if the information is readily
available.

 Where a qualified or adverse opinion is being issued, the auditor must amend
the statement '...the audit evidence is sufficient and appropriate to provide a
basis for the auditor's qualified/adverse opinion'.

5.6 Summary of modified opinions

Material but Not Material and Pervasive
Pervasive

Financial statements are Qualified Opinion Adverse Opinion
materially misstated
Except for ... FS do not give a true and
fair view
Basis for qualified opinion
Basis for adverse opinion

Inability to obtain Qualified Opinion Disclaimer of Opinion
sufficient appropriate
audit evidence Except for ... Do not express an opinion

Basis for qualified opinion Basis for disclaimer of
opinion

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