Page 141 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori

quantification of the financial effects of the misstatement, unless impracticable. If it is not practicable to
quantify the financial effects, the auditor shall so state in this section.
• Relates to Narrative Disclosures: If there is a material misstatement of the financial statements that
relates to narrative disclosures, the auditor shall include in the Basis for Opinion section an explanation
of how the disclosures are misstated.
• Relates to Non-Disclosure: If there is a material misstatement of the financial statements that relates to
the non- disclosure of information required to be disclosed, the auditor shall:
o Discussion: Discuss the non-disclosure with those charged with governance;
o Describe nature: Describe in the Basis for Opinion section the nature of the omitted information;
and
o Inclusion of Omitted Disclosures: Unless prohibited by law or regulation, include the omitted
disclosures, provided it is practicable to do so and the auditor has obtained sufficient appropriate
audit evidence about the omitted information.

2B. Unable to obtain SAAE: If the modification results from an inability to obtain sufficient appropriate audit
evidence, the auditor shall include in the Basis for Opinion section the reasons for that inability.
3. Amendment in Statement for Qualified or Adverse Opinion: When the auditor expresses a qualified or
adverse opinion, the auditor shall amend the statement about whether the audit evidence obtained is sufficient
and appropriate to provide a basis for the auditor’s opinion to include the word “qualified” or “adverse”, as
appropriate.
4. Amendments in case of Disclaimer of Opinion: When the auditor disclaims an opinion on the financial
statements, the auditor’s report shall not include following elements required under SA 700
4A. Exclusion of reference to Auditor’s Responsibilities Section: A reference to the section of the auditor’s
report where the auditor’s responsibilities are described; and
4B. Exclusion of Statement on Audit Evidence: A statement about whether the audit evidence obtained is
sufficient and appropriate to provide a basis for the auditor’s opinion.
5. Description of Other Matter Requiring Modification: Even if the auditor has expressed an adverse opinion
or disclaimed an opinion on the financial statements, the auditor shall describe in the Basis for Opinion section
the reasons for any other matters of which the auditor is aware that would have required a modification to the
opinion, and the effects thereof.

(CNO - SA 705.160) How Auditor should give description of Auditor’s Responsibilities for the Audit of the
Financial Statements When the Auditor Disclaims an Opinion on the Financial Statements?
1. Auditor's Independence and Ethical Responsibilities: The statement about auditor independence and other
ethical responsibilities required in SA 700.
2. Auditor’s Responsibility: The auditor's main responsibility is to perform an audit in line with the Standards
on Auditing and to issue an auditor's report.
3. Reference to Basis for Disclaimer: However, due to certain circumstances outlined in the Basis for Disclaimer
of Opinion section, the auditor couldn't gather enough appropriate audit evidence to form an audit opinion on
the financial statements.

(CNO - SA 705.180) Matrix to be considered to determine what type of modified opinion should be used
by the Auditor:

Nature of Matter Auditor’s judgment about the Pervasiveness of the
Giving Rise to the Effects or Possible Effects on the Financial
Modification: Statements

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