AUDITING AND ASSURANCE SERVICES IN MALAYSIA

TOPIC 12 : AUDIT REPORT

REFERENCE: CHAPTER 3AUD390 2014AUDITING AND ASSURANCE SERVICES IN MALAYSIA

LEARNING OUTCOMESAUD390 2014TYPES OF AUDIT REPORTCOMPONENTS OF AN UNMODIFIED AUDIT REPORTDEPARTURES FROM AN UNMODIFIED AUDIT REPORT

AUD390 2014Audit Report the final stage in the entire audit processA written communication of audit findings to the shareholdersTypes of audit reportStandard unqualified / Unmodified audit reportUnqualified / Unmodified audit report with Emphasis of Matter ParagraphQualified Qualified opinionQualified Report - Disclaimer opinionQualified Report - Adverse opinionINTRODUCTION

1. STANDARD UNQUALIFIED / UNMODIFIED AUDIT REPORTAUD390 2014CONDITIONTO ISSUE STANDARDUNQUALIFIED AUDIT REPORTAll statements are included in the FSNo circumstances requiringthe addition of explanatoryparagraph or modificationof wordingISAs have been followedIn all respects on theengagementSufficient evidencehas been accumulatedFS are presented in accordance with approvedaccounting standards.Adequate disclosure have been included

ContAUD390 2014SUAR consist:Report TitlesAudit Report AddressIntroductory ParagraphScope ParagraphOpinion ParagraphName of CA firm & signature of auditorAuditors addressAudit report date

1. Report TitleAUD390 2014All audit report are required to be titleThe title must include the word independentFor e.g.Independent auditors reportReport of independent auditorReport of the Auditor to the Members of Sintok Hardware Sdn Bhd

2. Audit Report AddressAUD390 2014Normally report is addressed to the company, stakeholders, the Board of DirectorsFor e.g.Report of the Auditor to the Members of Sintok Hardware Sdn Bhd

3. Introductory ParagraphAUD390 2014Consist of Simple statement that the CA firm has done an auditE.g. we have audited the financial statements of Sintok Hardware Sdn Bhd set out on page __ to __Lists of FS that were auditedE.g. comprising of the balance sheet of the company and notes to the account as at 31st December 2005 and of the profit and loss account and the cash flow statementStatement of the responsibility of management & auditors responsibilityE.g. The preparation of the financial statements is the responsibility of the companys directors. Our responsibility is to express an opinion on the financial statements based on our audit.

4. Scope ParagraphAUD390 2014A factual statement about what the auditor did in the auditConsist of:Statement that the auditor followed Malaysian Approved Standards of AuditingWe conducted our audit in accordance with approved standards on auditingStatement that the audit is designed, planned and performed to obtain reasonable assurance about whether the statements are free of material misstatementsto provide us with sufficient evidence to give reasonable assurance that the financial statements are free of material misstatement

ContAUD390 2014Highlight the audit evidence accumulated and statement that the auditor believes that the evidence accumulated was appropriate to express the opinion presentedE.g. Our audit includes examining, on a test basis, evidence relevant to the amounts and disclosures in the financial statements. Our audit includes assessment of accounting principles used and significant estimates made by the directors as well as evaluation of the adequacy of the presentation of information in the financial statements. We believe our audit provides a reasonable basis for our audit.

5. Opinion ParagraphAUD390 2014States the auditors conclusions based on the results of the auditIt is a statement of opinion rather a statement of absolute fact or a guarantee, due:Conclusions are based on professional judgmentThere may be some information risk associated with the financial statements, even though the statements have been audited

6. Name Of CA Firm & Signature Of AuditorAUD390 2014Identifies the CA firm and the auditor who performed the auditE.g.Bakar & AnthonyFirm No: XXXXChartered AccountantsAlor Setar

7. Auditors AddressAUD390 2014The location of the audit firm

8. Audit Report DateAUD390 2014Refer to the completion date of the audit assignmentIndicates the last day of the auditors responsibility for the review of significant events that occurred after the date of the financial statements

AUD390 2014Reasons for the issuance of this report:Emphasis of matter (pp. 56)Substantial doubt about going concern (pp. 57)2. UNQUALIFIED / UNMODIFIED AUDIT REPORT WITH EMPHASIS OF MATTER PARAGRAPH

AUD390 2014

AUD390 2014Conditions results in issuing modified audit report:The scope of the audit has been restricted (Scope Limitation)Disagreement

1. Scope LimitationAUD390 2014Arises when the auditor has not accumulated sufficient evidence to conclude whether FS are stated in accordance with CA Act 1965

SCOPE LIMITATIONRESTRICTION IMPOSED BY THE CLIENTE.g. Management refuse to permit the auditor to perform stock count or to confirm account receivable with debtorsRESTRICTION CAUSED BY CIRCUMSTANCES BEYOND EITHER THE CLIENTS OR AUDITOR CONTROLE.g. To perform stock count of inventories after clients year end

2. DisagreementAUD390 2014Arises where the auditor is able to express an opinion but his opinion differs from the view expressed by the management in the FS

Examples.Non-conformity with the provisions of the CA Act 1965 & other legislationNon-compliance with approved accounting standardsDisagreements with facts or amounts included in the financial statementsInadequate disclosure of facts or amounts included in the FS

AUD390 2014CONDITIONSFINDING MATERIAL & NOT PERVASIVEFINDING MATERIAL & PERVASIVELIMITATION ON SCOPE OF AUDITQUALIFIED OPINIONDISCLAIMER OF OPINIONDISAGREEMENT WITH MANAGEMENTQUALIFIED OPINIONADVERSE OPINION

TYPES OF QUALIFIED AUDIT REPORT TO PRODUCEMaterial: the omission, non disclosure, misstatement of an item would influence the decision of users of FSPervasive: one matter which is so significant as to undermine the FS as a whole