Audit-Report Sample

SUBJECT: AUDITING AND ASSURANCE: CONCEPTS AND APPLICATIONS 2

This is a continuation of Auditing and Assurance: Concepts and Application I, focusing on financial
statements audit. It deals specifically with the application of auditing standards techniques, and
substantive tests of balances and analytical procedures to inventories and costs of sales, property and
equipment, investments, intangible assets, deferred charges, liabilities (current and non-current),
owners’ equity accounts, income statements accounts. The course culminates in the discussion of
completing the audit, audit report and audited financial statements preparation.

(Read, understand and memorize the Indepent Auditor’s Report)

INDEPENDENT AUDITOR’S REPORT
To the Shareholders of ABC Company [or Other Appropriate Addressee]
Report on the Audit of the Financial Statements
Opinion We have audited the financial statements of ABC Company (the Company), which comprise the
statement of financial position as at December 31, 20X1, and the statement of comprehensive income,
statement of changes in equity and statement of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying financial statements present fairly, in all material respects, the
financial position of the Company as at December 31, 20X1, and its financial performance and its cash
flows for the year then ended in accordance with Philippine Financial Reporting Standards (PFRSs).
Basis for Opinion
We conducted our audit in accordance with Philippine Standards on Auditing (PSAs). Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Statements section of our report. We are independent of the Company in accordance with the
International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA
Code) together with the ethical requirements that are relevant to our audit of the financial statements in
the Philippines, the Code of Ethics for Professional Accountants in the Philippines (Philippine Code of
Ethics), and we have fulfilled our other ethical responsibilities in accordance with these requirements
and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current period. These matters were addressed in the context of
our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Responsibilities of Management and Those Charged with Governance for the Financial Statements2
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with PFRSs,3 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.
In preparing the financial statements, management is responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless management either intends to liquidate the Company or to
cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting
process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with PSAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
Report on Other Legal and Regulatory Requirements
The engagement partner on the audit resulting in this independent auditor’s report is [name].
[Signature in the name of the audit firm, the personal name of the auditor, or both, as appropriate for
the particular jurisdiction]
[Auditor Address]
[Date]

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SUBJECT: AUDITING AND ASSURANCE: CONCEPTS AND APPLICATIONS 2

(Read, understand and memorize the Indepent Auditor’s Report)

INDEPENDENT AUDITOR’S REPORT

To the Shareholders of ABC Company [or Other Appropriate Addressee]

Report on the Audit of the Financial Statements

Basis for Opinion

Key Audit Matters

Auditor’s Responsibilities for the Audit of the Financial Statements

Report on Other Legal and Regulatory Requirements

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