AUDIT REPORTING

- KAMS (Key Audit Matters)

- Parties = 3-party relationship (Responsible party, Intended users, Practitioner)
- Responsible Party (Management + Those Charge With Governance) (Assertions in FS)
- Intended users (Primary and secondary users)
- Practitioner (Auditor)
- Miscalculations/Misvaluations are included in Notes to the Financial Statements

RIORICA – Reperformance Inspection Observance Recalculation Inquiry Confirmation Analytical

Procedures

Objectives of Auditor

- Form opinion based on conclusion drawn from evidence obtained

- Express clearly that opinion through written report

Formation of Opinion

- Reach reasonable assurance by:

- Sufficient and appropriate evidence
- Material uncorrected misstatements
- FS prepared in accordance with standards

Expression of Opinion

Types:

1) Unmodified/Unqualified = “Presents fairly, in all material respect”/”Give a true and fair view”
2) Modified/Qualified = “Except for” -> in the first statement (material)
3) Adverse = “Do not present fairly, in all material respect” (material and pervasive)
4) Disclaimer of Opinion = “We do not express a conclusion” -> no opinion -> prevented to perform
certain audit procedures thus unable to obtain sufficient evidence to form a proper conclusion

Parts of the Auditor’s Report

1) Title – should indicate that this is a report of an INDEPENDENT auditor

2) Addressee
3) Auditor’s Opinion – whose FS have been audited, state fs have been audited, all titles of each fs,
refer to the notes, specify date/period covered by fs (ex. We have audited Jollibee Corporation)

4) Basis of Opinion – audit conducted in accordance with PSAs, refer to section of responsibilities,
auditor is independent from entity n fulfill ethical responsibilities, state if evidence is sufficient n
appropriate

5) Other Information – Case-to-case basis, not required, important financial/non-financial info

included in annual report (mga significant info na nangyari sa year), purpose: identify material
inconsistency and respond appropriately to said inconsistency, what to do: discuss w
management, obtain annual report on timely manner, read annual report n determine
inconsistency, consider impact when management refuses to eliminate material inconsistency
 (auditor cannot correct fs, only tell management to correct because it’s their responsibility).
Opinion on FS does not cover other info

6) Management Responsibilities for the Financial Statements – Prepare FS in accordance w

framework, Internal Control, Assess ability to continue as a going concern, Disclosing matters
relating to going concern

7) Auditor’s Responsibilities for the Audit of the Financial Statements – Objectives, level of
assurance (reasonable, high but not absolute), causes of misstatements, definition of materiality
(case-to-case basis, no quantitative threshold), professional judgment and n maintenance of
professional skepticism, description of audit
8) Name and Signature of the Auditor – report must be signed (written required in PH), listed
entities (name of engagement partner must be indicated), discuss w TCWG if auditor intends not
to include engagement partner in report, reason: because of threats
9) Auditor’s address – where auditor practices
10) Date of Report – No earlier than/ on or after the date on which the auditor has obtained
sufficient appropriate audit evidence (field work)/issuance of FS

KEY AUDIT MATTERS

- Matters of most significance in the audit of FS in the current period

- 1 Matters communicated w TCWG 2 Matters requiring significant auditor attention
08/12/20023negative confirmation requests may be used when the assessed level of inherent and
control risks are high. a small number of large balances is involved. a substantial number of errors is
expected. the auditor has no reason to believe that respondents will disregard negative confirmation
requests.

Auditing –