IAASB revises audit report effective for 2006

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03 Jan 2005

The International Auditing and Assurance Standards Board (IAASB) has updated International Standard on Auditing 700 The Independent Auditor's Report on a Complete Set of General Purpose Financial Statements including a new form of the auditor's report.

The revised ISA 700:
  • Provides guidance for an audit conducted in accordance with both ISAs and the auditing standards of a specific jurisdiction, including how the auditor's report should be worded.
  • Adds guidance on the auditor's consideration of whether an accounting framework is acceptable, and on the need for the auditor to consider whether the financial statements are misleading even when they comply in all respects with that framework.
  • Separates audit reporting in connection with an ISA audit from additional supplementary reporting responsibilities required in some jurisdictions.

Under ISA 700 revised, the auditor's report must contain:

  • Title indicating that it is the report of an independent auditor.
  • Addressee.
  • Introductory paragraph that identifies the financial statements covered by the audit and refers to the summary of accounting policies and explanatory notes.
  • Explanation of management's responsibility for the financial statements, including responsibility for internal controls, for selecting and applying accounting policies, and for making reasonable estimates.
  • Explanation of the auditor's responsibilities, including description of what an audit involves.
  • Auditor's opinion, including reference to conformity with IFRSs or International Public Sector Accounting Standards (IPSASs) or with another reporting framework.
  • Other reporting responsibilities as required by individual jurisdictions.
  • Auditor's signature.
  • Date of the auditor's report.
  • Auditor's address.
The revised IAS 700 is effective for auditor's reports dated on or after 31 December 2006. The full text of ISA 700 may be downloaded without charge from IFAC's Website. Click here for Press Release (PDF 134k).

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