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SAS
No. 33 The
Auditor's Report on Financial Statements |
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 Status |
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Revised by Auditing Standards Committee in Taiwan on 21 December,
1999. |
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Summary |
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The auditor should review and assess the conclusions drawn from the
audit evidence obtained as the basis for the expression of an
opinion on the financial statements. The auditor’s report should
contain a clear written expression of opinion on the financial
statements taken as a whole. |
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The auditor’s report includes the following basic elements,
ordinarily in the following layout:
(a) Title;
(b) Addressee;
(c) Opening or introductory paragraph
(d) Scope paragraph
(e) Opinion paragraph
(f) Date of the report;
(g) Auditor’s address; and
(h) Auditor’s signature. |
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The auditor’s report should have an appropriate title to distinguish
the auditor’s report from reports that might be issued by others. |
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Introductory Paragraph |
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The auditor’s report should identify the financial statements of the
entity that have been audited, including the date of and period
covered by the financial statements. The report should include a
statement that the financial statements are the responsibility of
the entity’s management and a statement that the responsibility of
the auditor is to express an opinion on the financial statements
based on the audit. |
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Scope Paragraph |
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The auditor’s report should describe the scope of the audit by
stating that the audit was conducted in accordance with generally
accepted auditing standards or in accordance with relevant national
standards or practices as appropriate. The report should include a
statement that the audit was planned and performed to obtain
reasonable assurance about whether the financial statements are free
of material misstatement.
The auditor’s report should describe the audit as including:
(a) Examining, on a test basis, evidence to support the financial
statement amounts and disclosures;
(b) Assessing the accounting principles used and significant
estimates made by management in the preparation of the financial
statements; and
(c) Evaluating the overall financial statement presentation. |
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The report should include a statement by the auditor that the audit
provides a reasonable basis for the opinion. |
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Opinion Paragraph |
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The opinion paragraph of the auditor’s report should clearly state
the auditor’s opinion as to whether the financial statements are
presented fairly, in all material respects, in accordance with
generally accepted accounting principles and, where appropriate,
whether the financial statements comply with statutory requirements. |
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Date of Report |
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The auditor should date the report as of the completion date of the
audit. |
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The Auditor’s Reports |
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Unqualified Report |
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An unqualified opinion should be expressed when the auditor
concludes that the financial statements are presented fairly, in all
material respects, in accordance with generally accepted accounting
principles. |
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Modified Reports |
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An auditor’s report is considered to be modified in the following
situations: |
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Matters that Do Not Affect the Auditor’s Opinion |
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Certain circumstances, while not affecting the auditor’s unqualified
opinion, may require that the auditor add an explanatory paragraph
(or other explanatory language) to the standard report. These
circumstances include:
l
The auditor’s opinion is based in part on the report of another
auditor.
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There is substantial doubt about the entity’s ability to continue as
a going concern.
l
There has been a material change between periods in accounting
principles or in the method of their application.
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Opinion on prior-period financial statements different from the
opinion previously expressed.
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Prior period financial statements were audited by another auditor.
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Emphasis of a significant matter. |
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Matters that Do Affect the Auditor’s Opinion |
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An auditor may not be able to express an unqualified opinion when
either of the following circumstances exists and, in the auditor’s
judgment, the effect of the matter is or may be material to the
financial statements:
(a) There is a limitation on the scope of the auditor’s work; or
(b) There is a disagreement with management regarding the
acceptability of the accounting policies selected, the method of
their application or the adequacy of financial statement
disclosures.
The circumstances described in (a) could lead to a qualified opinion
or a disclaimer of opinion. The circumstances described in (b) could
lead to a qualified opinion or an adverse opinion. |
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Qualified Opinion |
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A
qualified opinion should be expressed when the auditor
concludes that an unqualified opinion cannot be expressed but that
the effect of any disagreement with management, or limitation on
scope is not so material and pervasive as to require an adverse
opinion or a disclaimer of opinion. A qualified opinion should be
expressed as being ‘except for’ the effects of the matter to which
the qualification relates. |
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Disclaimer of Opinion |
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A
disclaimer of opinion should be expressed when the possible
effect of a limitation on scope is so material and pervasive that
the auditor has not been able to obtain sufficient appropriate audit
evidence and accordingly is unable to express an opinion on the
financial statements. |
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Adverse Opinion |
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An adverse opinion should be expressed when the effect of a
disagreement is so material and pervasive to the financial
statements that the auditor concludes that a qualification of the
report is not adequate to disclose the misleading or incomplete
nature of the financial statements. |
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Whenever the auditor expresses an opinion that is other than
unqualified, a clear description of all the substantive reasons
should be included in the report and, unless impracticable, a
quantification of the possible effect(s) on the financial
statements. This information would be set out in a separate
paragraph preceding the opinion or disclaimer of opinion on the
financial statements and may include a reference to a more extensive
discussion, if any, in a note to the financial statements. |
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 Effective
date
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This Statement is effective from 31 December, 1999. |
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