The auditor evaluates the conclusions drawn from the evidence obtained in conducting the assurance engagement as the basis for the auditor’s opinion/conclusion as required under LPS 310.

If the auditor:

1. concludes that a material misstatement, internal control deficiency and/or non compliance exists; or
2. is unable to obtain sufficient appropriate assurance evidence to conclude whether a material misstatement, internal control deficiency and/or non compliance may exist,

the auditor modifies the opinion/conclusion, and includes a clear description of the reasons in the assurance report, in accordance with the requirements of, as appropriate, ASA 705 Modifications to the Opinion in the Independent Auditor’s Report (ASA 705) or ASA 706 Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report (ASA 706) and applicable ASAEs. (Refer Appendix 2 of this Guidance Statement).

As required under LPS 310, the auditor of a life company must provide the reports to the life company’s Board (or Board Audit Committee)^[19], to ensure the life company can provide the reports to APRA within the timeframes specified in LRS 001.

To avoid the possibility of the assurance report being used for purposes for which it was not intended, the auditor indicates in the auditor’s report the purpose for which the report is prepared and any restrictions on its distribution and use in an emphasis of matter paragraph as required by ASA 706 (refer paragraphs 30-36).

AUASB Standards do not prescribe a standardised format for reporting on all assurance engagements. Instead, both Auditing Standard ASA 800 and ASAE 3000 identify the basic elements required to be included in the assurance report. The short form auditor’s report ordinarily includes only the basic elements. Appendix 1 provides an example auditor’s report with Section A illustrating a reasonable assurance report on the APRA Annual Returns and Section B illustrating a limited assurance report on Controls to ensure compliance with APRA Prudential Requirements.

Assurance reports are tailored to the specific assurance engagement circumstances. Although not specifically required under LPS 310, the auditor may consider it appropriate to include other information and explanations that do not directly affect the auditor’s opinion or conclusions, but provide additional useful information to the users (that is, a ‘long form’ style of reporting). The inclusion of this information depends on its significance to the needs of the intended users. The following are examples of additional information that may be considered for inclusion:

• Disclosure of materiality considerations (materiality levels) applied.
• Significant findings or exceptions relating to particular aspects of the assurance engagement.
• Recommendations.

The auditor ensures that this additional information is clearly separated from the auditor’s opinion and conclusions, and worded in a manner to ensure that it does not affect the opinion and conclusions. This can be achieved, for example, by including any additional information in:

1. a separate appendix to the auditor’s short form assurance report; or
2. a separate section of the auditor’s short form assurance report, following the ‘opinion and conclusions’^[20] in an other matter paragraph as required by ASA 706 Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report (ASA 706).

This will enable users to clearly distinguish this additional information from the auditor’s responsibility to report on the matters identified in LPS 310.

Refer to Appendix 1 of this Guidance Statement for an illustrative example of the auditor’s annual prudential assurance report (short form report), prepared pursuant to APRA’s LPS 310 annual reporting requirements.