The document outlines the four types of audit reports issued by independent auditors, detailing the importance of 'true and fair view' in financial statements. It describes the necessary steps auditors must take before engaging with clients and highlights the differences between unqualified, qualified, adverse, and disclaimer audit reports, including their conditions. Additionally, it emphasizes the importance of proper planning and compliance with ethical standards to maintain auditor-client relationships.

1. TOPIC TODAY 
Four Types of Audit Report by
Four Types of Audit Report by
Independent Auditors
Independent Auditors
The Steps to be Done by the
Auditors Before They Receive
New Engagement With Clients
The Steps to be Done by the
Auditors Before They Receive
New Engagement With Clients
The Contents Emphasis in the
The Contents Emphasis in the
Audit Engagement
Audit Engagement
NAME : RAFIDAH BINTI YUSUF
NO.MATRIC : 38441

2. INTRODUCTION

3. True and Fair View
True means an accounts must be prepared in accordance
with fact and reality.
Fair means accounts must not be bias, it should be just and
equitable.
Accounts will not be true and fair unless the quality and
quantity of information is sufficient to satisfy reasonable
expectations of the readers to whom they are addressed
(stakeholders,banker and etc) .

4. Four Types of Audit
Report by
Independent
Auditors

5. Standard Unqualified Audit
Report (SUAR)
This report only being issued when :
All statements are
included in the FS
No circumstances requiring
the addition of explanatory
paragraph or modification
of wording
ISAs have been followed
In all respects on the
engagement
Sufficient evidence
has been accumulated
FS are presented in
accordance with approved
accounting standards.
Adequate disclosure have
been included
#International #International SSttaannddaarrdd AAuuddiittiinngg((IISSAAss))

6. Basic Elements In The
SUAR Report
1.)Title. The title used is “auditors report to the
shareholders”
2.)Address. The report is addressed to the company,its
stakeholder or board of director
3.)Introductory . Indicating the date and the period covered
in examining the financial statements by the auditor
4.)Scope paragraph. What the auditor did in the entire audit
process

7. Basic Elements In The
SUAR Report
5.)Opinion paragraph.States the auditor’s
conclusion/opinion on the results of audit examination.
6.)Auditor’s name
7.)Auditor’s address
8.)Date of the report

9. Unqualified Audit Report With
Explanatory Paragraph or Modified
Wording
55 rreeaassoonn wwhhyy aauuddiittoorr’’ss iissssuuaannccee tthhiiss rreeppoorrtt…………
11..))LLaacckk ooff ccoonnssiisstteenntt aapppplliiccaattiioonn ooff aapppprroovveedd aaccccoouunnttiinngg ssttaannddaarrddss
22..))SSuubbssttaannttiiaall ddoouubbtt aabboouutt ggooiinngg ccoonncceerrnn
33..))AAuuddiittoorr aaggrreeee wwiitthh aa ddeeppaarrttuurree ffrroomm pprroommuullggaatteedd aaccccoouunnttiinngg
pprriinncciipplleess(aauuddiittoorr bbeerrsseettuujjuu ddggnn ppeenngguummuummaann ddaarrii ppeerruubbhhnn pprriinnssiipp ppeerraakkaauunnaann))
44..))EEmmpphhaassiiss ooff aa mmaatttteerr
55..))RReeppoorrttss iinnvvoollvviinngg ootthheerr aauuddiittoorrss

10. The Factor Causes Uncertainty
in Going Concern Disclosure
l 1.)The significant recurring operating loosssseess oorr wwoorrkkiinngg ccaappiittaall
ddeeffiicciieenncciieess
22..))IInnaabbiilliittyy ooff tthhee ccoommppaannyy ttoo ppaayy iittss oobblliiggaattiioonnss aass tthheeyy ccoommee dduuee
33..))LLoossss ooff mmaajjoorr ccuussttoommeerrss,,tthhee ooccccuurrrreennccee ooff uunniinnssuurreedd ccaattaassttrroopphheess
ssuucchh aass aann eeaarrtthhqquuaakkee oorr fflloooodd oorr uunnuussuuaall llaabboorr ddiiffffiiccuullttiieess
44..))LLeeggaall pprroocceeeeddiinnggss,,lleeggiissllaattiioonn oorr ssiimmiillaarr mmaatttteerrss tthhaatt hhaavvee ooccccuurrrreedd
tthhaatt mmiigghhtt jjeeooppeerrddiizzee tthhee eennttiittyy’’ss aabbiilliittyy ttoo ooppeerraattee

11. Unqualified Audit Report With
Explanatory Paragraph or Modified
Wording
WWhhyy wwee pprreeppaarree tthhiiss rreeppoorrtt ??
AA ccoommpplleettee aauuddiitt ttooookk ppllaaccee wwiitthh ssaattiissffaaccttoorryy rreessuullttss aanndd
ffiinnaanncciiaall ssttaatteemmeennttss pprreesseenntt aa ttrruuee aanndd ffaaiirr vviieeww,, bbuutt tthhee
aauuddiittoorr bbeelliieevveess tthhaatt iitt iiss iimmppoorrttaanntt oorr rreeqquuiirreedd ttoo
pprroovviiddee aaddddiittiioonnaall iinnffoorrmmaattiioonn aanndd eexxppllaannaattoorryy
ppaarraaggrraapphh ttoo rreeccoovveerr tthhee wweeaakknneessss tthhaatt eexxiissttss iinn aauuddiittiinngg
rreeppoorrtt ..

12. Condition to Required a Departure
From an Unqualified Audit Report
Inherent Uncertainty(ketidakpastian yg
wujud)
Are situations which might affect the fs and
which by their nature rather than by
limitations in the scope of the audit, mean
that their outcome cannot be objectively or
reasonable determined .
Eg:Doubts on outcome of a contracts, going
concern

13. Condition to Required a Departure
From an Unqualified Audit Report
Limitation on the Scope of the
Audit
Arises when the auditor is not able to obtain for any reason,
all the information and explanations which he considers
necessary for the audit.
Two categories of limitation that is caused by restrictions
imposed by the client(sekatan yg dikenakan oleh
pelanggan) and those caused by circumstances beyond
either the client’s or auditor’s control

14. Condition to Required a Departure
From an Unqualified Audit Report
Disagreement(ketidaksetujuan)
 Arises in a situations where the auditor is able to form an opinion but
the opinion differs from the view expressed by the management in
the fs.
Circumstances giving rise to disagreement would include:
 Non compliance with the provisions of the companies act 1965
 Non conformity with approved accounting standards
 Disagreement with the facts or amounts included in the fs
 Inadequate disclosure of facts or amounts included in the fs

15. Qualified Audit Report
Can arise due to limitations on scope of
work or failure to follow approved
accounting standards. A qualified report
can be used only when the auditor
concludes that the overall financial
statement s give a true and fair view. In
the report, the auditor must use “ except
for”

16. Adverse or Disclaimer
Audit Report
ADVERSE OPINION
Only used when the overall fs are so materially misstated or
misleading that they do not present a true and fair view.
Normally in the absence of conformity
DISCLAIMER OF OPINION
Where the auditor has been unable to satisfy himself or
herself that the overall fs are fairly presented . Severe
limitation on audit scope

17. The Steps Should be
Done by the Auditors
Before They Receive New
Engagement With Clients

18. TThhee PPrreelliimmiinnaarryy SStteeppss SShhoouulldd BBee
DDoonnee BByy AAuuddiittoorrss BBeeffoorree EEnnggaaggee WWiitthh
CClliieennttss
1.) Perform procedures regarding the continuance of the client
relationship and the specific audit engagement.
2.) Ensure compliance with independence and ethics requirements,
and (Note: The determination of compliance with independence
and ethics requirements is not limited to preliminary engagement
activities and should be reevaluated with changes in circumstances).
3.) Establish an understanding of the terms of the audit engagement
with the audit committee in accordance with Auditing Standard No.
16, Communications with Audit Committees.

19. The Steps Consideration That Auditor Emphasis Before
Engagement With Client is as Illustrated below :

20. 33 MMaaiinn WWhhyy AAuuddiittoorrss SShhoouulldd PPllaann PPrrooppeerrllyy
PPllaann EEnnggaaggeemmeenntt wwiitthh CClliieenntt
1.)To enable auditor to obtain sufficient competent evidence for the
circumstances(to minimise legal liability and maintain a good
reputation in the business community)
2.)To help audit cost reasonable(helps the firm audit reputation remain
competitive)
3.)To aviod misunderstanding with the clients(to have good relation
with clients and for faciliate high-work quality at reasonable cost)

21. The Contents
Emphasis in the
Audit Engagement

23. TTHHEE EENNDD