Revised Audit Report SA 700

1. BY PAVAN KALYAN S

2. i. The requirements of SA are aimed at addressing an appropriate
balance between the need for consistency and comparability in
auditors reporting globally and
ii. Increase the value of auditor reporting by making the information
provided in the auditor’s report more relevant to users.
iii. It also helps to promote the user’s understanding and to
identify unusual circumstances when they occur.
Source from ICAI Study Material

3. Date and Place of Signature
Signature of the Auditor
Other Reporting responsibilities
Other matter
Emphasis of matter
Auditors Opinion
Basis for qualified opinion
Auditors Responsibility
Management’s Responsibility for the Financial Statements
Introductory Paragraph
Addressee
Title
Current Audit Report format
Place and Date of Audit Report
Signature of the auditor
Other reporting responsibility
Auditors responsibility
Management responsibility for financial statement
Other Matter
Key Audit Matters
Emphasis of matter
Basis for opinion
Opinion
Addressee
Title
Revised Audit Report

4. First paragraph in the opinion = Introductory paragraph of
earlier Audit report
And
Auditor
to give
Information
required by
the act in
the manner
so required
True and
fair view of
the
Financial
statements

5. Even required for unmodified opinion will include:

6. Going Concern
that no material uncertainty exists.
2
3
► The revised standard introduced from April 1, 2017, the scope of the
auditor has been increased manifolds which includes auditor’s
responsibility in the audit of financial statements relating to going
concern and the implications for the auditor’s report. i.e a new
requirement for auditor to evaluate the adequacy of disclosures in
going concern.
► A separate section with the heading “Material uncertainty related to
Going Concern” is required in the auditor’s report to highlight the
existence of any material uncertainties related to going concern -
(instead of reporting under Emphasis of Matter para)

7. ► Management responsibilites (Ref to Sec 134(5)):
Director’sresponsibility
statement
Accounting Standards
Accounting Policies
and estimates
Accounting records
Going concern basis
Internal Financial
Controls

8. ► Auditorsresponsibilites:
Auditor to obtain Reasonable Assurance that the financial statements
are free from material misstatements.
Annexure:
► Our objectives are to obtain …
As part of an audit in accordance with SAs, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
a) Identify and assess the risks of material misstatements of the financial statements,....
b) Obtain an understanding of internal control relevant to the audit …[143(3)(i)]
c) Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
d) Conclude on the appropriateness of management’s use of the going concern basis of
accounting…
e) Evaluate the overall presentation, structure and content of the financial statements
… (for fair presentation)

9. ► Management is responsible for the other information. The other
information comprises the [information included in the report], but does not
include the financial statements and our auditor’s report thereon.
► Our opinion on the financial statements does not cover the other
information and we do not express any form of assurance conclusion
thereon.
► In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise appears to
be materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information; we
are required to report that fact. We have nothing to report in this regard.
Information other than the financial
statements and auditor’s report thereon

10. ► Those points covered under section 143(3) and Rule 11 of companies Audit and
auditors rules:
a) We have sought and obtained all the information and explanations…
b) In our opinion, proper books of account as required by law have been kept ….
c) whether the report on the accounts of any branch office of the company audited under subsection (8)
by a person other than the company‘s auditor has been sent to him…..
d) The Financial Statements dealt with by this Report are in agreement with the books of account
and with the returns received from the branches not visited by us.
e) In our opinion, the aforesaid standalone financial statements comply with the Accounting
Standards specified ….
f) The observations or comments of the auditors on financial transactions or matters which have any
adverse effect on the functioning of the company;
g) None of the directors is disqualified as on 31st March, 20XX from being appointed as a director in
terms of Section 164 (2) of the Act.
h) Any qualification, reservation or adverse remark relating to the maintenance of accounts and other
matters connected therewith.
i) With respect to the adequacy of the internal financial controls over financial reporting of the
Company and the operating effectiveness of such controls.
j) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11
of the….
i. The Company has disclosed the impact of pending litigations on its financial position in its
financial statements ..
ii. The Company has made provision, as required under the applicable law or accounting standards,
for material foreseeable losses, if any,
iii. There has been no delay in transferring amounts, required to be transferred, to the IEPF..
Reporting on other legal & regulatory
requirements

11. ► Applicability
CARO 2016 not apply to
Banking, Insurance, OPC, Sec 8 companies and Private
Limited Companies*
*
a. Paid up capital and free reserves < 1 crore
b. Total borrowings < 1 Crore
c. Turnover as per Schedule III < 10 Crores
CARO 2016

12. Supplementary Information – (Ref SA 720)
Whether SI forms integral part of FS
Yes No
Whether SI is clearly differentiated
Yes No
Ask Management to differentiate
Agree -
Ok Refuse
Explain in Audit Report
That SI is not Audited

13. Thank You