ISA 600, 700, 705,

706 and 710

1 ISA 600
Special Considerations Audits of Group Financial Statements
(Including The Work of Component Auditors)
Definition in ISA 600

Principal auditor Other auditor Component

The auditor with An auditor, other than A division, branch,
responsibility for the principle auditor, subsidiary, joint
reporting on the FS of with responsibility for venture, associated
an entity when those reporting on the entity or other entity
FS include financial financial information whose financial
information of one or of a component information is
more component which is included in included in the FS
auditors audited by the FS audited by the audited by the
another auditor. principal auditor. principal auditor.
The principal auditor should,
therefore

Ensure that Obtain an

component understanding of
Consider how the auditors have the the consolidation
work of the other specific levels of process, including
auditor will affect skills and the instructions
the audit competence to issued by group
carry out the audit management to
work effectively component entities
Materiality

In order to ensure the In audits where For all entities within the
aggregate of uncorrected component are deemed group, the group auditor
and undetected insignificant the audit shall review a report of the
misstatements in the engagement partner shall work done by the
groups FS does not exceed undertake analytical component auditor,
the materiality level for the procedures at group level. regardless of materiality.
group FS as a whole,
component materiality
levels must be set lower
than the materiality level for
the group FS as a whole.
Other things

Reporting under Alternative Communication

GAAP Timely communication of the
Asking management and group engagement teams
TCWG to restate the requirements to the
accounts under the parents component auditor shall take
GAAP place
2 ISA 700
Forming an Opinion on the Financial Stataments
Opinion
Unqualified
When the auditor concludes that
the FS present fairly, in all
material respects.
Qualified
When the auditor concludes that
an unqualified opinion cannot be
expressed but that the effect of
any disagreement with
management, or limitation on
scope is not so material and
pervasive as to require an
adverse opinion or a disclaimer
of opinion.
Opinion (2)
Adverse
When the effect of a
disagreement is so material and
pervasive to the FS that the
auditor concludes that a
qualified opinion is not adequate
to disclose the misleading or
incomplete nature of the FS.
Disclaimer
When the possible effect of a
limitation on the scope of the
auditors work is so material and
pervasive that the auditor has
not been able to obtain sufficient
appropriate audit evidence and
accordingly is unable to express
an opinion on the FS.
3 ISA 705
Modifications to The Opinion in The Independent Auditors Report
Scope Limitation

An inability to carry out

Absence of proper
audit procedures
accounting records
considered necessary
 Pervasive
If so confined, represent, or could represent, a substantial
proportion of the FS. In relation to disclosures are
fundamental to users understanding of FS.
Disagreement

Inappropriate accounting policies

The facts or amounts included in the FS

The manner or extent of disclosure of facts or

amounts in the FS

Failure to comply with relevant legislation or

other requirements
4 ISA 706
Emphasis of Matter Paragraphs and Other Matter(s) Paragraphs in The
Independent Auditors Report
 Emphasis of Matter
Paragraphs
A paragraph included in the auditors report that refers to
a matter appropriately presented or disclosed in the FS
that, in the auditors judgement, is of such importance
that it is fundamental to users understanding of the FS
Emphasis of matter paragraph is
usually included in the FS when
there is significant uncertainty
about a situation(s), the outcome
of which is dependent on future
occurrences.
Where the auditor encounters
multiple uncertainties, then
depending on the magnitude of
the multiple uncertainties, the
auditor may conclude that an
emphasis of matter paragraph is
not appropriate.
4 ISA 710
Comparative Information Corresponding Figures and Comparative
Financial Statements
Definition in ISA 710
Comparative
Information
The amounts and
disclosures in the FS in
respect of one or more
prior periods in accordance
with the applicable financial
reporting framework.
Corresponding
Figures
Comparative information
where amounts and
disclosures for the prior
period are included as an
integral part of the current
period period FS, and are
intended to be read only in
relation to the amounts and
other disclosures relating to
the current period.
Comparative
Financial Statements
Comparative information
where amounts and
disclosures for the prior
period are included for
comparison and with the FS
of the current period but, if
audited, are referred to in
the auditors opinion.
Opening Balances
Initial Engagement
Using the previous years FS
and confirm that current
accounting policies have
been consistently applied.
Review main BS opening
balances and consider the
risk of material misstatement
in the current periods FS due
to error in the brought
forward figures.
Carry out sufficient audit
procedures to confirm that
the comparatives are
reasonable.
Continuing Audits
Check that balances have been
correctly brought forward into
the current year
Prior Period Modification
Resolved: Auditors opinion in
the current period need not to
refer to the previous
modifications.
Unresolved: The report on the
current periods FS should be
qualified regarding opening
balances and comparatives.
Prior Period FS Not Audited
States in an other matter
paragraph in the auditors report
that the corresponding figures
are unaudited.
Prior Period FS Audited by
Predecessor Auditor
State in an other matter
paragraph:
FS of the prior period were
audited by a predecessor
auditor
Type of opinion expressed
and, if opinion was modified,
the reasons
Date of the report
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