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Inappropriate Phrases: When the auditor expresses an unmodified opinion, it is not appropriate to use
phrases such as “with the foregoing explanation” or “subject to” in relation to the opinion, as these
suggest a conditional opinion or a weakening or modification of opinion.

QNO Basis for Opinion Para Old Course—(N19R/S20M/S21M/N20R/N19R)
700.11 Bhaskar CNO - SA700.040
The auditor’s report shall include a section, directly following the Opinion section, with the heading “Basis

for Opinion”. Explain what is included in this “Basis for Opinion” section.
Answer

Management Responsibility Paragraph Old Course—
QNO Bhaskar CNO - SA700.040 (M17E/M19M/M20M/M21M/S20M/S21M/M23M/M23R)
700.13
New Course – (N23E)
The auditor's report shall include a section with a heading “Responsibilities of Management for the Financial
Statements.” Give a brief description about management's responsibilities in the auditor's report as it helps
to explain the users the premise on which an audit is conducted.

Also state the requirement specified in Standard on Auditing 210 for the auditor to agree management's
responsibilities
OR
The auditor’s report shall include a section with a heading “Responsibilities of Management for the Financial
Statements.” SA 200 explains the premise, relating to the responsibilities of management and, where
appropriate, those charged with governance, on which an audit in accordance with SAs is conducted. Explain
OR
State in brief, the management’s responsibilities relating to the audit of financial statements.
Answer “Responsibilities of Management for the Financial Statements” section of the auditor’s report shall describe
management’s responsibility for:
(i) Preparing the financial statements in accordance with the applicable financial reporting framework,
and for such internal control as management determines is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error and

(ii) Assessing the entity’s ability to continue as a going concern and whether the use of the going concern
basis of accounting is appropriate as well as disclosing, if applicable, matters relating to going concern.
The explanation of management’s responsibility for this assessment shall include a description of
when the use of the going concern basis of accounting is appropriate.

SA 210 requires the auditor to agree the management’s responsibilities in an engagement letter or other
suitable form of written agreement.

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