Page 128 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori

SA-705 - Modifications to the Opinion in the Independent Auditor’s Report
Modification: The purpose of SA-705 is to issue an appropriate auditor’s report when the auditor considers the
modification of the audit opinion in the report is necessary. It deals with the revised form and content when the
modification of the opinion takes place.

SA-706 - Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s
Report
EMP: The purpose is to draw user’s attention to a matter or matters that are presented or disclosed in the financial
statements and are fundamental for the user's understanding of Financial Statement.
OMP: It also aims to highlight matters not presented or disclosed in the financial statement but are relevant for
the user's understanding related to Audit.

SA 700

Forming an Opinion and Reporting on The Financial Statements

(CNO - SA 700.020) Objective
As per SA 700 the objectives of the auditor are:
Form Opinion: To form an opinion on the financial statements based on an evaluation of the conclusions drawn
from the audit evidence obtained; and
Make Report: To express clearly that opinion through a written report.
Purpose.
Applicability: SA 700 is relevant for audits of complete general-purpose financial statements.
Balance: This SA aims to achieve a balance between global consistency in auditor reporting and enhancing report
relevancy for users.
Consistency: While promoting consistency, the SA acknowledges the need for flexibility and highlights its role
in enhancing global marketplace credibility.

(CNO - SA 700.040) Forming an opinion on the Financial Statements
1A. Opinion Formation: The auditor shall form an opinion on whether the financial statements are prepared,
in all material respects, in accordance with the applicable financial reporting framework.
1B. Fair Presentation Evaluation: If the financial statements are prepared under a fair presentation framework,
the auditor must evaluate their overall presentation, structure, content, and whether they accurately represent
the underlying transactions and events.
2. Obtain reasonable Assurance: The auditor needs to obtain reasonable assurance that the financial statements
are free from material misstatement, whether due to fraud or error.
3. Express Opinion: The auditor should express an unmodified opinion if they conclude that the financial
statements are prepared in accordance with the applicable financial reporting framework and are free from
material misstatement.

(CNO - SA 700.060) Basic Elements of the Auditor’s Report
As per SA 700 “Forming an opinion and reporting on financial statements”, the auditor’s report shall be in
writing and shall include the following basic elements, which ordinarily includes in case of Auditors’ Report for
Audits Conducted in Accordance with Standards on Auditing:

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