Sample Audit Reports

CPA Guidance:
Sample Auditor’s Reports

Effective for accounting
periods ending on or after
15th December 2005.
April 2006
The Institute of Certified Public Accountants in Ireland

Index Page
Introduction 4
SECTION 1: UNMODIFIED AUDITOR’S REPORTS ON FINANCIAL

STATEMENTS
Example 1 – Auditor’s report on individual company financial

Statements. 6

Statements with the exemptions under PASE
Availed of. 8

Statements. Financial Statements contain surround
information other than directors’ report 11
Example 4 – Auditor’s report on group and parent company

Financial Statements. 13
Example 5 – Auditor’s report on Abridged Financial Statements. 16
SECTION 2: MODIFIED AUDITOR’S REPORTS ON FINANCIAL STATEMENTS

(EXCLUDING GOING CONCERN ISSUES)
Example 6 – Unqualified opinion –Emphasis of matter. Possible

Outcome of a lawsuit to unable quantify effect on
Financial Statements. 21
Example 7 – Qualified opinion-Disagreement, inappropriate

accounting treatment of debtors. 24
Example 8 – Qualified opinion-Disagreement, prior period

Qualification unresolved and results in a modification
Of the auditor’s report regarding the current period
Figures. 25
Example 9 – Qualified opinion-Limitation on scope. Auditor not

Appointed at time of the stock take. 26
Example 10 – Disclaimer of opinion. Unable to observe all physical

Stock and confirm trade debtors. 28
Example 11 – Adverse opinion. No provision made for losses

To arise on certain long term contracts. 30
SECTION 3: MODIFIED AUDITOR’S REPORTS ON FINANCIAL STATEMENTS

ARISING FROM GOING CONCERN ISSUES
2
Example 12 – Unqualified opinion. Emphasis of matter. Material
Uncertainty about the Company’s ability to continue
As a going concern 33
Example 13 – Qualified opinion-Disagreement. Irish GAAP financial

Statements where the going concern period
Considered by directors does not comply with FRS 18
But is disclosed. 35
Example 14 – Qualified opinion-Disagreement. Non-disclosure of

Going concern problem. 37
Example 15 – Qualified opinion-Limitation of scope. Evidence

Available to auditor regarding going concern status
Was limited because cash flow forecasts were only
Prepared for a period of nine months from approval
Of financial statements. 39
Example 16 – Disclaimer of opinion. Going concern-company has

Not prepared profit or cash flow projections for an
Appropriate period subsequent to the balance sheet
date. 41
Example 17 – Adverse opinion. Significant level of concern about

Company’s ability to continue as a going concern that
Is not disclosed in the financial statements. 43
3
Introduction
In January 2006, the Auditing Practices Board issued APB Bulletin 2006/1 “Auditor’s
Reports on Financial Statements in the Republic of Ireland”. This information leaflet
has been produced to assist practicing members with audit reports for non-publicly
traded companies.
The purpose of this information leaflet is to provide illustrative examples of
a. Unmodified auditor’s reports for audits of financial statements of companies

incorporated in the Republic of Ireland:
a. Performed in accordance with the International standards on Auditing
(UK and Ireland) (ISAs UK and Ireland) issued by the Auditing
Practices Board; and
b. For periods commencing on or after 15 December 2004
b. Modified auditors reports (excluding going concern issues)

c. Modified auditors reports arising from going concern issues
This information leaflet applies to “non-publicly traded companies” – defined as

“those who do not have any securities that are admitted to trading on a regulated
market in any member state in the European Union”. Auditor reports for publicly
traded companies are not covered in this information leaflet. For further guidance on
auditor reports for publicly traded companies please review the APB Bulletin 2006/1
“Auditor’s reports on Financial Statements in the Republic of Ireland”.
In addition to the sample auditor reports on the APB Bulletin 2006/1 we have also
included a standard unqualified auditor report for abridged financial statements
(Example 5) and an audit report where the exemptions under the Ethical Standards
“Provisions Available for Small Entities” are availed of (Example 2).
4
SECTION 1
UNMODIFIED AUDITOR’S REPORTS ON FINANCIAL STATEMENTS

This section contains examples of unmodified auditor’s reports on financial
statements for non-publicly traded companies incorporated in the Republic of
Ireland
5
Example 1 – Non-publicly traded company incorporated in the Republic of
Ireland – Auditor’s report on individual company financial statements
• Company DOES NOT prepare group financial statements

• Irish GAAP use to prepare individual financial statements
• Financial statements contain NO surround information other than the
directors’ report
• Auditor does not take advantage of ES PASE
INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF XXX

LIMITED
We have audited the financial statements of XXX Limited for the year ended
………..which comprise (state the primary financial statements such as the Profit and
Loss Account, the Balance Sheet, (cash flow statement), the Statement of Total
Recognised Gains and Losses) and the related notes. These financial statements
have been prepared under the accounting policies set out therein.
This report is made solely to the company's members as a body in accordance with
the requirements of the Companies Acts 1963 to 2005. Our audit work has been
undertaken so that we might state to the company's members those matters that we
are required to state to them in the audit report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the company or the company’s members as a body for our audit work, for
this report, or for the opinions we have formed.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
As described in the Statement of Directors’ Responsibilities the company’s directors

are responsible for the preparation of the financial statements in accordance with
applicable law and the accounting standards issued by the Accounting Standards
Board.
Our responsibility is to audit the financial statements in accordance with relevant

legal and regulatory requirements and International Standards on Auditing (UK and
Ireland).
We report to you our opinion as to whether the financial statements give a true and
fair view in accordance with Generally Accepted Accounting Practice in Ireland and
are properly prepared in accordance with the Companies Acts 1963 to 2005. We also
report to you whether in our opinion: proper books of account have been kept by the
company; whether, at the balance sheet date, there exists a financial situation
requiring the convening of an extraordinary general meeting of the company; and
whether the information given in the Directors’ Report is consistent with the financial
statements. In addition, we state whether we have obtained all the information and
explanations necessary for the purposes of our audit and whether the company’s
Balance Sheet and its Profit and Loss Account are in agreement with the books of
account.
6
We report to the shareholders if, in our opinion, any information specified by law
regarding directors’ remuneration and directors’ transactions is not disclosed, and
where practicable, include such information in our report.
We read the Directors’ Report and consider the implications for our report if we
become aware of any apparent misstatement within it.
BASIS OF AUDIT OPINION
We conducted our audit in accordance with International Standards on Auditing (UK

and Ireland) issued by the Auditing Practices Board. An audit includes examination,
on a test basis, of evidence relevant to the amounts and disclosures in the financial
statements. It also includes an assessment of the significant estimates and
judgements made by the directors in the preparation of the financial statements, and
of whether the accounting policies are appropriate to the company’s circumstances,
consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with sufficient
evidence to give reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or other irregularity or error. In
forming our opinion we also evaluated the overall adequacy of the presentation of
information in the financial statements.
OPINION
In our opinion the financial statements give a true and fair view, in accordance with
Generally Accepted Accounting Practice in Ireland, of the state of the company’s
affairs as at………….. and of its profit/(loss) for the year then ended and have been
properly prepared in accordance with the Companies Acts 1963 to 2005.
We have obtained all the information and explanations we consider necessary for the
purpose of our audit. In our opinion, proper books of account have been kept by the
company. The financial statements are in agreement with the books of account.
In our opinion, the information given in the Directors’ Report is consistent with the
financial statements.
The net assets of the company, as stated in the balance sheet are more than half of
the amount of its called up share capital and, in our opinion, on that basis there did
not exist at …………… a financial situation which, under section 40(1) of the
Companies (Amendment) Act 1983, would require the convening of an extraordinary
general meeting of the company.
ABC & Co.,

Certified Public Accountants
& Registered Auditors,
14 Green Street,
Dublin 11.
Date
7

• Irish GAAP used to prepare individual financial statements
directors’ report
• The Auditor avails of the exemptions granted under the Ethical Standard
“Provisions Available for Small Entities”

LIMITED

Board.

Ireland).
account.
8

We have undertaken the audit in accordance with the requirements of the APB
Ethical Standards – Provisions Available for Small Entities, in the
circumstances set out in note X to the financial statements. *(Disclose in the
notes to the financial statements the type of non-audit services provided to the audit
client or the fact that a former engagement partner has joined the client)
OPINION
9
ABC & Co.,

14 Green Street,
Dublin 11.
Date
10

• Financial statements contain surround information other than the
directors’ report

LIMITED
The Directors’ Responsibilities for preparing the Annual Report and the financial
statements in accordance with applicable law and the accounting standards issued
by the Accounting Standards Board are set out in the Statement of Directors’
Responsibilities.

Ireland).
are properly prepared in accordance with the Companies Acts 1963 to 2005. We
also report to you whether in our opinion: proper books of account have been kept by
the company; whether, at the balance sheet date, there exists a financial situation
account.
11
We read the other information contained in the Annual Report, and consider whether
it is consistent with the audited financial statements. This other information comprises
only (the Directors’ Report and the Chairman’s Statement and the Operating and
Financial Review). We consider the implications for our report if we become aware of
any apparent misstatement or material inconsistencies with the financial statements.
Our responsibilities do not extend to any other information.

OPINION
ABC & Co.,

14 Green Street,
Dublin 11.
Date
12
Ireland – Auditor’s report on group and Parent company financial statements
• Group and parent company financial statements not present separately.

• Company prepares group financial statements
• Irish GAAP used for group and parent company financial statements
• Section 148(8) Companies Act 1963 exemption taken for parent
company’s own profit and loss account.

LIMITED
We have audited the group and parent company financial statements of XXX Limited
for the year ended ………..which comprise (state the primary financial statements
such as the Group Profit and Loss Account, the Group and Company Balance
Sheets, the Group Cash Flow Statement, the Group Statement of Total Recognised
Gains and Losses) and the related notes. These financial statements have been
prepared under the accounting policies set out therein.
The Directors’ Responsibilities for preparing the Annual Report and the financial
statements in accordance with applicable law and the accounting standards issued
by the Accounting Standards Board are set out in the Statement of Directors’
Responsibilities.

Ireland).
are properly prepared in accordance with the Companies Acts 1963 to 2005 and the
European Communities (Companies: Group Accounts) Regulations 1992. We also
account.
13
We read the other information contained in the Annual Report, and consider whether
it is consistent with the audited financial statements. This other information comprises
only (the Directors’ Report and the Chairman’s Statement and the Operating and
Financial Review). We consider the implications for our report if we become aware of
any apparent misstatement or material inconsistencies with the financial statements.
Our responsibilities do not extend to any other information.

OPINION
Generally Accepted Accounting Practice in Ireland, of the state of the group’s and
company’s affairs as at………….. and of the group’s profit/(loss) for the year then
ended and have been properly prepared in accordance with the Companies Acts
1963 to 2005 and the European Communities (Companies: Group Accounts)
Regulations, 1992.
14
ABC & Co.,

14 Green Street,
Dublin 11.
Date
15
Ireland – Auditor’s report on Abridged Financial Statements

directors’ report
AUDITORS’ REPORT TO THE DIRECTORS OF XXX LIMITED PURSUANT TO

SECTION 18(4) OF THE COMPANIES (ADMENDMENT) ACT 1986
We have examined:
(i) the abridged financial statements for the year ended ……….. on pages
…. to….which the director’s of XXX Limited propose to annex to the
annual return of the company; and
(ii) the financial statements to be laid before the Annual General Meeting,
which form the basis for those abridged financial statements.
Respective responsibilities of directors and auditors
It is your responsibility properly to prepare the abridged financial statements. It is our

responsibility to form an independent opinion on those abridged financial statements
and to report our opinion to you.
Basis of opinion
The scope of our work for the purpose of this report was limited to confirming that the
directors are entitled to annex abridged financial statements to the annual return and
that those abridged financial statements have been properly prepared, pursuant to
Sections 10 to 12 of the Companies (Amendment) Act 1986, from the financial
statements to be laid before the Annual General Meeting. The scope of our work for
the purpose of this report does not include examining or dealing with events after the
date of our report on the full financial statements.
Opinion
In our opinion the directors are entitled under Section 18 of the Companies
(Amendment) Act 1986 to annex to the annual return of the company abridged
financial statements and those abridged financial statements have been properly
prepared pursuant to the provisions of Sections 10 to 12 of that Act (exemptions
available to small and medium-sized companies)*
ABC & Co.,

14 Green Street,
Dublin 11.
Date
*Where, in the auditors’ opinion, the abridgement process has impaired the true and
fair view given by the financial statements to be laid before the Annual General
Meeting the following additional paragraph should be included.
16
“In our opinion the abridged financial statements do not give a true and fair view
because ….(outlining the auditors’ reservations).
AUDITORS’ SPECIAL REPORT TO THE DIRECTORS OF XXX LIMITED

PURSUANT TO SECTION 18(3) OF THE COMPANIES (ADMENDMENT) ACT
1986
On …….. we reported, as auditors’ of XXX Limited, to the directors of the company

on the copy of the abridged financial statements for the year ended…….. on
pages…to ….and our report was as follows:
We have examined:
(i) the abridged financial statements for the year ended ……….. on pages
…. to….which the director’s of XXX Limited propose to annex to the
annual return of the company; and
(ii) the financial statements to be laid before the Annual General Meeting,
which form the basis for those abridged financial statements.
Respective responsibilities of directors and auditors
It is your responsibility properly to prepare the abridged financial statements. It is our

responsibility to form an independent opinion on those abridged financial statements
and to report our opinion to you.
Basis of opinion
The scope of our work for the purpose of this report was limited to confirming that the
directors are entitled to annex abridged financial statements to the annual return and
that those abridged financial statements have been properly prepared, pursuant to
Sections 10 to 12 of the Companies (Amendment) Act 1986, from the financial
statements to be laid before the Annual General Meeting. The scope of our work for
the purpose of this report does not include examining or dealing with events after the
date of our report on the full financial statements.
Opinion
In our opinion the directors are entitled under Section 18 of the Companies
(Amendment) Act 1986 to annex to the annual return of the company abridged
financial statements and those abridged financial statements have been properly
prepared pursuant to the provisions of Sections 10 to 12 of that Act (exemptions
available to small and medium-sized companies).
Other information
On ………. we reported as auditors of XXX Limited, to the members on the

company’s financial statements for the year ended ……….. to be laid before it
General Meeting, and our report was as follows:
“We have audited the financial statements of XXX Limited for the year ended
17

Board.

Ireland).
account.

18
OPINION
general meeting of the company”.
ABC & Co.,

14 Green Street,
Dublin 11.
Date
19
SECTION 2
MODIFIED AUDITOR’S REPORTS ON FINANCIAL STATEMENTS (EXCLUDING

GOING CONCERN ISSUES)
This section contains the following examples of modified auditor’s reports on
financial statements:
• Examples of reports where the matter does not affect the auditor’s
opinion for example, emphasis of matter paragraphs; and
• Example of reports where the matter does affect the auditor’s opinion
for example;
o Qualified opinions
o Disclaimers of opinion
o Adverse opinions
20
Example 6 – Unqualified opinion- Emphasis of matter. Possible outcome of a
lawsuit, unable to quantify effect on financial statements.
• Irish non-publicly traded company prepares Irish GAAP financial

statements.
• A lawsuit alleges that the company has infringed certain patent rights
and claims royalties and punitive damages. The company has filed a
counter action, and preliminary hearings and discovery proceedings on
both actions are in progress.
• The ultimate outcome of the matter cannot presently be determined, and
no provision for any liability that may result has been made in the
• The company makes relevant disclosures in the financial statements
• The auditor issues an unqualified auditor’s report with an emphasis of
matter paragraph describing the situation giving rise to the emphasis of
matter and its possible effects on the financial statements, including
that the effect on the financial statements of the resolution of the
uncertainty cannot be quantified.

LIMITED

Board.

Ireland).
21
account.

OPINION
Emphasis of matter- possible outcome of a lawsuit

In forming our opinion, which is not qualified, we have considered the
adequacy of the disclosures made in note x to the financial statements
22
concerning the possible outcome of a lawsuit, alleging infringement of certain
patent rights and claiming royalties and punitive damages, where the company
is the defendant. The company has filed a counter action, and preliminary
hearings and discovery proceedings on both actions are in progress. The
ultimate outcome of the matter cannot presently be determined, and no
provision for any liability that may result has been made in the financial
statements.
ABC & Co.,

14 Green Street,
Dublin 11.
Date
23
Example 7 – Qualified opinion- Disagreement, inappropriate accounting
treatment of debtors.

statements.
• The debtors shown on the balance sheet include an amount of €y due
from a company which has ceased trading. XXX Limited has no security
for this debt.
• The auditor’s opinion is that the company is unlikely to receive any
payment and full provision of €y should have been made
• The auditor does not believe that the effect of the disagreement is so
material and pervasive that the financial statements as a whole are
misleading and issues a qualified opinion – except for disagreement
about the accounting treatment of debtors.
• The auditor concludes that it is still possible to express the “financial
situation” opinion
QUALIFIED OPINION ARISING FROM DISAGREEMENT ABOUT ACCOUNTING TREATMENT
Included in the debtors shown on the balance sheet is an amount of €y due

from a company which has ceased trading. XXX Limited has no security for
this debt. In our opinion the company is unlikely to receive any payment and
full provision of €y should have been made. Accordingly, debtors should be
reduced by €y, deferred taxes should be reduced by €x and profit for the year
and retained earnings should be reduced by €z.
Except for the financial effect of not making the provision referred to in the
preceding paragraph, In our opinion the financial statements give a true and fair
view, in accordance with Generally Accepted Accounting Practice in Ireland, of the
state of the company’s affairs as at………….. and of its profit/(loss) for the year then
ended and have been properly prepared in accordance with the Companies Acts
1963 to 2005.
ABC & Co.,

14 Green Street,
Dublin 11.
Date
24
Example 8 – Qualified opinion- Disagreement, prior period qualification
unresolved and results in a modification of the auditor’s report regarding the
current period figures.

statements.
• Included in the debtors shown on the balance sheet of 31 December
20x4 and 31 December 31 20x5 is an amount of €y which is the subject
of litigation and against which no provision has been made. The auditor
considers that a full provision of €y should have been made in the year
ended 31 December 20x4.
situation” opinion.
Included in the debtors shown on the balance sheets of 31 December 20x4 and
31 December 20x5 is an amount of €y which is the subject of litigation and
against which no provision has been made. In our opinion, full provision of €y
should have been in the year ended 31 December 20x4. Accordingly, debtors at
31 December 20x4 and 20x5 should be reduced by €y, deferred income taxes at
31 December 20x4 and 20x5 should be reduced by €x, and the profit for the
year ended 31 December 20x4 and the retained earnings at 31 December 20x4
and 20x5 should be reduced by €z.
In our opinion the financial statements give a true and fair view, in accordance
with Generally Accepted Accounting Practice in Ireland, of the company’s
profit(loss) for the year ended 31 December 20x5
Except for the financial effect of not making the provision referred to in the
preceding paragraph, In our opinion the financial statements give a true and fair
view, in accordance with Generally Accepted Accounting Practice in Ireland, of the
state of the company’s affairs as at 31 December 20x5 and have been properly
prepared in accordance with the Companies Acts 1963 to 2005.
ABC & Co.,

14 Green Street,
Dublin 11.
Date
25
Example 9 – Qualified opinion- Limitation on scope. Auditor not appointed at
the time of the stock take.

statements.
• The evidence available to the auditor was limited because they did not
observe the counting of the physical stock as at 31 December 20x1,
since that date was prior to the time the auditor was initially engaged as
auditor for the company. Owing to the nature of the company’s records,
the auditor was unable to satisfy themselves as to stock quantities by
other audit procedures.
• The limitation in audit scope causes the auditor to issue a qualified
opinion except for any adjustments that might have been found to be
necessary had they been able to obtain sufficient evidence concerning
stock.

and Ireland) issued by the Auditing Practices Board except that the scope of our
work was limited as explained below.
An audit includes examination, on a test basis, of evidence relevant to the amounts

and disclosures in the financial statements. It also includes an assessment of the
significant estimates and judgements made by the directors in the preparation of the
financial statements, and of whether the accounting policies are appropriate to the
company’s circumstances, consistently applied and adequately disclosed.
We planned our audit so as to obtain all the information and explanations which we
considered necessary in order to provide us with sufficient evidence to give
reasonable assurance that the financial statements are free from material
misstatement, whether caused by fraud or other irregularity or error. However, with
respect to stock having a carry amount of €x the evidence available to us was
limited because we did not observe the counting of the physical stock as of 31
December 20x1, since that date was prior to our appointment as auditors of the
company. Owing to the nature of the company’s records, we were unable to
obtain sufficient appropriate audit evidence regarding the stock quantities by
using other audit procedures.
In forming our opinion we also evaluated the overall adequacy of the presentation of
Except for the financial effects if such adjustments, if any, as might have been
determined to be necessary had we been able to satisfy ourselves as to
physical stock quantities, In our opinion the financial statements give a true and
fair view, in accordance with Generally Accepted Accounting Practice in Ireland, of
the state of the company’s affairs as at 31 December 20x1and of its profit/(loss) for
the year then ended and have been properly prepared in accordance with the
Companies Acts 1963 to 2005.
In respect solely of the limitation on our work relating to stocks:
26
• We have not obtained all the information and explanations that we
considered necessary for our audit; and
• We were unable to determine whether proper accounting records had
been maintained.
The financial statements are in agreement with the books of account.
not exist at 31 December 20x1a financial situation which, under section 40(1) of the
ABC & Co.,

14 Green Street,
Dublin 11.
Date
27
Example 10 – Disclaimer of opinion. Unable to observe all physical stock and
confirm trade debtors

statements.
• The evidence available to the auditor was limited because the auditor
was not able to observe all physical stock and confirm trade debtors
due to limitations placed on the scope of the auditor’s work by the
company.
• As a result, the auditor has been unable to form a view on the financial
statements and issues a modified opinion disclaiming the view given by
the financial statements.

and Ireland) issued by the Auditing Practices Board except that the scope of our

misstatement, whether caused by fraud or other irregularity or error. However, the
evidence available to us was limited because we were unable to observe the
counting of physical stock having a carrying amount of €x and send
confirmation letters to trade debtors having a carrying amount of €y due to
limitations placed on the scope of our work by the company. As a result of this
we have been unable to obtain sufficient appropriate audit evidence
concerning both stock and trade debtors. Because of the significance of these
items, we have been unable to form a view on the financial statements.
QUALIFIED: DISCLAIMER ON VIEW GIVEN BY FINANCIAL STATEMENTS
Because of the possible effect of the limitation in evidence available to us, we

are unable to form an opinion as to whether the financial statements give a true
and fair view, in accordance with Generally Accepted Accounting Practice in Ireland,
of the state of the company’s affairs as at …………and of its profit/(loss) for the year
then ended and have been properly prepared in accordance with the Companies
Acts 1963 to 2005.
Whether there did or did not exist at …… a financial situation under Section
40(1) of the Companies (Amendment) Act, 1983 would require the convening of
an extraordinary general meeting of the company
In respect solely of the limitation on our work referred to above:
28
• We have not obtained all the information and explanations that we
considered necessary for our audit; and
• We were unable to determine whether proper books of account have
been kept by the company.
The financial statements are in agreement with the books of account.
ABC & Co.,

14 Green Street,
Dublin 11.
Date
29
Example 11 – Adverse opinion. No provision made for losses expected to arise
on certain long term contracts

statements.
• No provision has been made for losses expected to arise on certain
long-term contracts currently in progress, as the directors consider that
such losses should be offset against amounts recoverable on other
long-term contracts.
• In the auditor’s opinion, provision should be made for foreseeable
losses on individual contracts as required by (specify accounting
standards)
• The auditor issues an adverse opinion due to the failure to provide for
the losses and quantifies the impact on the profit for the year, the
contract work in progress, and deferred taxes payable at the year-end.
situation” opinion
ADVERSE OPINION
As more fully explained in note x to the financial statements no provision has

been made for losses expected to arise on certain long-term contracts
currently in progress, as the directors consider that such losses should be off-
set against amounts receivable on other long-term contracts. In our opinion,
provision should be made for foreseeable losses on individual contracts as
required by (specify accounting standards)….. If losses has been so
recognised the effect would have been to reduce the carrying amount of
contract work in progress by €x, deferred taxes payable by €y, and profit for
the year and the retained earnings at 31 December 20x1 by €z.
In view of the effect of the failure to provide for the losses referred to above, in
our opinion the financial statements DO NOT give a true and fair view, in accordance
with Generally Accepted Accounting Practice in Ireland, of the state of the company’s
affairs as at 31 December 20x1 and of its profit/(loss) for the year then ended.
In all other respects, in our opinion the financial statements have been properly
We have obtained all the information and explanations which we consider necessary
for the purposes of our audit. In our opinion proper books of account have been kept
by the company. The financial statements are in agreement with the books of
account.
30
not exist at 31 December 20x1a financial situation which, under section 40(1) of the
ABC & Co.,

14 Green Street,
Dublin 11.
Date
31
SECTION 3
MODIFIED AUDITOR’S REPORTS ARISING FROM GOING CONCERN ISSUES

– EXTRACTS FROM MODIFIED REPORTS.
32
Example 12 – Unqualified opinion- Emphasis of matter. Material uncertainty
about the Company’s ability to continue as a going concern.

statements.
• The company incurred a net loss of €x during the year ended 31
December 20x1 and, as of that date, the company’s current liabilities
exceeded its total assets by €y
• These conditions, along with other matters set forth in the notes to the
financial statements, indicate the existence of a material uncertainty,
which may cast significant doubt the company’s ability to continue as a
going concern.
• The company makes relevant disclosures in the financial statements
• The auditor issues an unqualified auditor’s report with an emphasis of
matter paragraph setting out the basis of the auditor’s opinion,
describing the situation giving rise to the emphasis of matter and its
possible effects on the financial statements, including (where
practicable) quantification.

OPINION
affairs as at 31 December 20x1 and of its profit/(loss) for the year then ended and
have been properly prepared in accordance with the Companies Acts 1963 to 2005.
not exist at 31 December 20x1 a financial situation which, under section 40(1) of the
33
Emphasis of matter- Going concern

In forming our opinion, which is not qualified, we have considered the
adequacy of the disclosures made in note x to the financial statements
concerning the company’s ability to continue as a going concern. The
company incurred a net loss of €x during the year ended 31 December 20x1
and, at that date the company’s current liabilities exceeded its total assets by
€y. These conditions, along with the other matters explained in note x to the
financial statements, indicate the existence of a material uncertainty which
may cast doubt about the company’s ability to continue as a going concern.
The financial statements do not include the adjustments that would result if the
company was unable to continue as a going concern.
ABC & Co.,

14 Green Street,
Dublin 11.
Date
34
Example 13 – Qualified opinion – Disagreement. Irish GAAP financial
statements where the going concern period considered by directors does not
comply with FRS 18 but is disclosed.

statements.
• In assessing whether it is appropriate to prepare the financial
statements on a going concern basis, the directors have paid particular
attention to a period ending 30 September 20x3 which is less than one
year from the date of approval of the financial statements on 31 October
20x2.
• The directors have not disclosed this fact in the financial statements
breaching the requirements of paragraph 61(b) of Financial Reporting
Standard 18 “Accounting policies”. FRS 18 requires the disclosure of
the fact that “the foreseeable future considered by the directors has
been limited to a period of less than one year from the date of approval
of the financial statements”.
• Although the auditors have concluded that there is no significant level
of concern about going concern, the failure to disclose the fact that the
foreseeable future considered by the directors has been limited to a
period of less than one year from the date of approval of the financial
statements is a breach of FRS 18 and the auditors issue a qualified
“except for” opinion describing the disagreement over the departure
from FRS 18
QUALIFIED OPINION ARISING FROM DEPARTURE FROM FRS 18 “ACCOUNTING POLICIES”
In assessing whether it is appropriate to prepare the financial statements on a

going concern basis the directors have paid particular attention to a period on
30 September 20x3 which is less than twelve months from the date of approval
of the financial statements. This fact has not been disclosed in the financial
statements, contrary to the requirements of Financial Reporting Standard 18
“Accounting Policies”
Except for the absence of the disclosure referred to above in our opinion the
financial statements give a true and fair view, in accordance with Generally Accepted
Accounting Practice in Ireland, of the state of the company’s affairs as at 31
December 20x1 and of its profit/(loss) for the year then ended and have been
35
ABC & Co.,

14 Green Street,
Dublin 11.
Date
36
Example 14 – Qualified opinion – Disagreement. Non-disclosure of going
concern problems.

statements.
• The financial statements do not disclose that the Company’s financing
arrangements expire and amounts outstanding are payable on 19 July
20x2 and that the Company has been unable to re-negotiate or obtain
replacement financing.
• The situation indicates the existence of a material uncertainty which
may cast significant doubt on the Company’s ability to continue as a
going concern and therefore it may be unable to realise its assets and
discharge its liabilities in the normal course of business.
• The auditor concludes that there is a significant level of concern about
going concern and disagrees with the failure to disclose this
information in the financial statements. The auditors issue a qualified
except for opinion describing the disagreement.
QUALIFIED OPINION ARISING FROM OMISSION OF INFORMATION CONCERNING GOING

CONCERN
The company’s financing arrangements expire and amounts outstanding are

payable on 19 July 20x2. The company has been unable to re-negotiate or
obtain replacement financing. This situation indicates the existence of a
material uncertainty which may cast significant doubt on the company’s ability
to continue as a going concern and therefore it may be unable to realise its
assets and discharge its liabilities in the normal course of business. The
financial statements (and notes thereto) do not disclose this fact.
Except for the omission of the information included in the preceding paragraph
in our opinion the financial statements give a true and fair view, in accordance with
affairs as at 31 December 20x1 and of its profit/(loss) for the year then ended and
have been properly prepared in accordance with the Companies Acts 1963 to 2005.
37
ABC & Co.,

14 Green Street,
Dublin 11.
Date
38
Example 15 – Qualified opinion- Limitation of scope. Evidence available to
auditor regarding going concern status was limited because cash flow
forecasts were only prepared for a period of nine months from approval of

statements.
• The evidence available to the auditor was limited because the company
had prepared cash flow forecasts and other information needed for the
assessment of the appropriateness of the going concern basis of
preparation of the financial statements only for a period of nine months
from the date of approval of the financial statements.
• Although this fact is disclosed in the financial statements had the
information been available the auditor might have formed a different
opinion. The auditor considers that those charged with governance
have not taken adequate steps to satisfy themselves that it is
appropriate for them to adopt the going concern basis.
• The auditor does not consider that the future period to which those
charged with governance have paid particular attention in assessing
going concern is reasonable in the entity’s circumstances. The auditor
considers that the particular circumstances of the company and the
nature of the company’s business require that such information be
prepared, and reviewed by the directors and auditor for a period of at
least twelve months from the date of approval of the financial
statements.
• The auditor issues an “except for” qualified opinion referring to the
adjustments that might have been found to be necessary had they
obtained sufficient evidence concerning appropriateness of the going
concern basis of preparation of the financial statements

and Ireland) issued by the Auditing Practices Board, except that the scope of our

evidence available to us was limited because the company has prepared cash
flow forecasts and other information needed for the assessment of the
appropriateness of the going concern basis of preparation of the financial
statements for a period of only nine months from the date of approval of these
financial statements. We consider that the directors have not taken adequate
steps to satisfy themselves that it is appropriate for them to adopt the going
concern basis because the circumstances of the company and the nature of
the business require that such information be prepared, and reviewed by the
39
directors and ourselves, for a period of at least twelve months from the date of
approval of the financial statements. Had this information been available to us
we might have formed a different opinion.
QUALIFIED OPINION ARISING FROM LIMITATION IN AUDIT SCOPE
Except for any adjustment that might have been found to be necessary had we
been able to obtain sufficient evidence concerning the appropriateness of the
going concern basis of preparation of the financial statements, in our opinion
the financial statements give a true and fair view, in accordance with Generally
Accepted Accounting Practice in Ireland, of the state of the company’s affairs as at
31 December 20x1 and of its profit/(loss) for the year then ended and have been
In respect solely of the limitation on our work relating to the assessment of the
appropriateness of the going concern basis of preparation of the financial
statements we have not obtained all the information and explanations that we
considered necessary for the purpose of our audit.
In our opinion, proper books of account have been kept by the company. The
financial statements are in agreement with the books of account.
ABC & Co.,

14 Green Street,
Dublin 11.
Date
40
Example 16 – Disclaimer of opinion. Going concern – company has not
prepared profit or cash flow projections for an appropriate period subsequent
to the balance sheet date.

statements.
• The evidence available to the auditor to confirm the appropriateness of
preparing the financial statements on the going concern basis was
limited because the company has not prepared profit or cash flow
projections for an appropriate period subsequent to the balance sheet
date.
• The auditor considers that the circumstances of the company and the
nature of the company’s business requires that such information be
prepared, and reviewed by the directors and the auditor, for a period of
at least twelve months from the date of approval of the financial
statements.
• The auditor concludes that the possible effect of this limitation on
scope is so material and pervasive that the auditor has been unable to
obtain sufficient appropriate audit evidence and accordingly is unable
to form an opinion on whether or not it is appropriate to prepare the
financial statements on a going concern basis. As a result, the auditor
issues an opinion disclaiming the view given by the financial
statements.

and Ireland) issued by the Auditing Practices Board, except that the scope of our

evidence available to us to confirm the appropriateness of preparing the
financial statements on the going concern basis was limited because the
company has not prepared any profit or cash flow projections for an
appropriate period subsequent to the balance sheet date. As a result, and in
the absence of any alternative evidence available to us, we have been unable
to form a view as to the applicability of the going concern basis, the
circumstances of which, together with the effect on the financial statements
should this basis be inappropriate, are set out in note x to the financial
statements.
41
OPINION: DISCLAIMER ON VIEW GIVEN BY THE FINANCIAL STATEMENTS
Because of the possible effect of the limitation in evidence available to us, we

are unable to form an opinion as to whether the financial statements, give a true
and fair view, in accordance with Generally Accepted Accounting Practice in Ireland,
of the state of the company’s affairs as at 31 December 20x1 and of its profit/(loss)
for the year then ended and have been properly prepared in accordance with the
Companies Acts 1963 to 2005.
In respect solely of the limitation on our work referred to above we have not
obtained all the information and explanations that we considered necessary for
the purpose of our audit.
In our opinion, proper books of account have been kept by the company. The
financial statements are in agreement with the books of account.
ABC & Co.,

14 Green Street,
Dublin 11.
Date
42
Example 17 – Adverse opinion. Significant level of concern about the
company’s ability to continue as a going concern that is not disclosed in the
financial statements

statements.
• Although there is a significant level of concern about the company’s
ability to continue as a going concern the financial statements and
notes do not disclose this fact and the directors have prepared the
financial statements on the going concern basis.
• The auditor considers that the financial statements should disclose that
there is a material uncertainty, which may cast doubt on the company’s
ability to continue as a going concern.
• The effect of this disagreement is so material and pervasive to the
amounts included within 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.
• The auditor issues an adverse opinion stating that, because the material
uncertainty regarding going concern is not disclosed, the financial
statements do not give a true and fair view.
ADVERSE OPINION
As explained in note x to the financial statements the company’s financing

arrangements expired and the amount outstanding was payable on 31
December 20x1. The company has been unable to re-negotiate or obtain
replacement financing and is considering entering insolvency proceedings.
These events indicate a material uncertainty which may cast significant doubt
on the company’s ability to continue as a going concern and therefore it may
be unable to realise its assets and discharge its liabilities in the normal course
of business. The financial statements (and notes thereto) do not disclose this
fact and have been prepared on the going concern basis.
In our opinion, because of the omission of the information mentioned above, the
financial statements do not give a true and fair view, in accordance with Generally
Accepted Accounting Practice in Ireland, of the state of the company’s affairs as at
31 December 20x1 and of its profit/(loss) for the year then ended.
In all other respects, in our opinion the financial statements have been properly
We have obtained all the information and explanations which we consider necessary
for the purposes of our audit. In our opinion, proper books of account have been kept
by the company. The financial statements are in agreement with the books of
account.
43
ABC & Co.,

14 Green Street,
Dublin 11.
Date
44

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CPA Guidance:

Sample Auditor’s Reports

The Institute of Certified Public Accountants in Ireland

SECTION 1: UNMODIFIED AUDITOR’S REPORTS ON FINANCIAL

Example 1 – Auditor’s report on individual company financial

Example 2 – Auditor’s report on individual company financial

Example 3 – Auditor’s report on individual company financial

Example 4 – Auditor’s report on group and parent company

Example 5 – Auditor’s report on Abridged Financial Statements. 16

SECTION 2: MODIFIED AUDITOR’S REPORTS ON FINANCIAL STATEMENTS

Example 6 – Unqualified opinion –Emphasis of matter. Possible

Example 7 – Qualified opinion-Disagreement, inappropriate

Example 8 – Qualified opinion-Disagreement, prior period

Example 9 – Qualified opinion-Limitation on scope. Auditor not

Example 10 – Disclaimer of opinion. Unable to observe all physical

Example 11 – Adverse opinion. No provision made for losses

SECTION 3: MODIFIED AUDITOR’S REPORTS ON FINANCIAL STATEMENTS

Example 13 – Qualified opinion-Disagreement. Irish GAAP financial

Example 14 – Qualified opinion-Disagreement. Non-disclosure of

Example 15 – Qualified opinion-Limitation of scope. Evidence

Example 16 – Disclaimer of opinion. Going concern-company has

Example 17 – Adverse opinion. Significant level of concern about

The purpose of this information leaflet is to provide illustrative examples of

a. Unmodified auditor’s reports for audits of financial statements of companies

b. Modified auditors reports (excluding going concern issues)

This information leaflet applies to “non-publicly traded companies” – defined as

UNMODIFIED AUDITOR’S REPORTS ON FINANCIAL STATEMENTS

• Company DOES NOT prepare group financial statements

INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF XXX

RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS

As described in the Statement of Directors’ Responsibilities the company’s directors

Our responsibility is to audit the financial statements in accordance with relevant

BASIS OF AUDIT OPINION

We conducted our audit in accordance with International Standards on Auditing (UK

ABC & Co.,

• Company DOES NOT prepare group financial statements

INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF XXX

RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS

As described in the Statement of Directors’ Responsibilities the company’s directors

Our responsibility is to audit the financial statements in accordance with relevant

BASIS OF AUDIT OPINION

We conducted our audit in accordance with International Standards on Auditing (UK

ABC & Co.,

• Company DOES NOT prepare group financial statements

INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF XXX

RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS

Our responsibility is to audit the financial statements in accordance with relevant

BASIS OF AUDIT OPINION

We conducted our audit in accordance with International Standards on Auditing (UK

ABC & Co.,

• Group and parent company financial statements not present separately.

INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF XXX

RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS

Our responsibility is to audit the financial statements in accordance with relevant

BASIS OF AUDIT OPINION

We conducted our audit in accordance with International Standards on Auditing (UK

ABC & Co.,

• Company DOES NOT prepare group financial statements

AUDITORS’ REPORT TO THE DIRECTORS OF XXX LIMITED PURSUANT TO

Respective responsibilities of directors and auditors

It is your responsibility properly to prepare the abridged financial statements. It is our

ABC & Co.,

AUDITORS’ SPECIAL REPORT TO THE DIRECTORS OF XXX LIMITED