| A15. | The auditor sets out its opinion[s] on these other reporting responsibilities in [a] separate section[s] of the report in order to clearly distinguish it from the auditor's opinion[s] on the financial statements. |
| A16. | Other reporting responsibilities may be determined by specific statutory requirements applicable to the reporting entity, or, in some circumstances, by the terms of the auditor's engagement19. Such matters may be required to be dealt with by either: |
| (a) | a positive statement in the auditor's report; or |
| (b) | by exception. |
| An example of (a) arises where the auditor of a company is required to state whether, in the auditor's opinion, the information given in the directors' report for the financial year for which the accounts are prepared is consistent with those accounts20. An example of (b) arises in the United Kingdom where company legislation requires the auditor of a company to report when a company has not maintained adequate accounting records21. An example of (b) arises in Ireland where company legislation requires the auditor to report when the disclosures of directors' remuneration and transactions specified by law are not made22. |
| A17. | Where the auditor has discharged such responsibilities and has nothing to report in respect of them, the conclusion could be expressed in the form of the following phrase: "We have nothing to report in respect of the following". |
| A18. | Where the auditor expresses a modified conclusion in respect of other reporting responsibilities (including those on which they are required to report by exception) this may give rise to a modification of the auditor's opinion on the financial statements. For example, if adequate accounting records have not been maintained and as a result it proves impracticable for the auditor to obtain sufficient appropriate evidence concerning material matters in the financial statements, the auditor's report on the financial statements includes a qualified opinion or disclaimer of opinion arising from that limitation.23 |
| A18A. | For entities that apply the UK Corporate Governance Code, the directors are required to give a statement in the annual report that they consider the annual report and accounts taken as a whole is fair, balanced and understandable and provides the information necessary for shareholders to assess the entity's performance, business model and strategy. Such entities are also required to include a separate section of the annual report that describes the work of the audit committee in discharging its responsibilities. This should include, inter alia, the significant issues that the audit committee considered in relation to the financial statements, including appropriate matters considered that were communicated to it by the auditor, and how these issues were addressed. |
| 19 An example of a reporting responsibility determined by the terms of the auditor's engagement is where the directors of a listed company are required by the rules of a Listing Authority to ensure that the auditor reviews certain statements made by the directors before the annual report is published. |
| 20 In the UK section 496 of the Companies Act 2006 and in Ireland section 15 of Companies (Amendment Act) 1986. |
| 21 Section 498(2) of the Companies Act 2006 |
| 22 Section 191(8) of the Companies Act 1963 and section 46 of the Companies Act 1990. |
| 23 ISA (UK and Ireland) 705 "Modifications to the opinion in the independent auditor's report" sets out the requirements relating to qualified opinions and disclaimer of opinions on financial statements. |
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