Written Representations (Ref: Para. 9)

In the case of a comparative financial report, the written representations are requested for all periods referred to in the auditor’s opinion because management needs to reaffirm that the written representations it previously made with respect to the prior period remain appropriate.  In the case of corresponding figures, the written representations are requested for the financial report of the current period only because the auditor’s opinion is on that financial report, which includes the corresponding figures.  However, the auditor requests a specific written representation regarding any restatement made to correct a material misstatement in the prior period financial report that affects the comparative information.

Corresponding Figures

No Reference in Auditor’s Opinion (Ref: Para. 10)

The auditor’s opinion does not refer to the corresponding figures because the auditor’s opinion is on the current period financial report as a whole, including the corresponding figures.

Modification in Auditor’s Report on the Prior Period Unresolved (Ref: Para. 11)

When the auditor’s report on the prior period, as previously issued, included a qualified opinion, a disclaimer of opinion, or an adverse opinion and the matter which gave rise to the modified opinion is resolved and properly accounted for or disclosed in the financial report in accordance with the applicable financial reporting framework, the auditor’s opinion on the current period need not refer to the previous modification. 

When the auditor’s opinion on the prior period, as previously expressed, was modified, the unresolved matter that gave rise to the modification may not be relevant to the current period figures.  Nevertheless, a qualified opinion, a disclaimer of opinion, or an adverse opinion (as applicable) may be required on the current period’s financial report because of the effects or possible effects of the unresolved matter on the comparability of the current and corresponding figures.

Illustrative examples of the auditor’s report if the auditor’s report on the prior period included a modified opinion and the matter giving rise to the modification is unresolved are contained in Illustrations 1, [Aus] 1A, 2 and [Aus] 2A of Appendix 1.

Misstatement in Prior Period Financial Report (Ref: Para. 12)

When a prior period financial report that is misstated has not been amended and an auditor’s report has not been reissued, but the corresponding figures have been properly restated or appropriate disclosures have been made in the current period financial report, the auditor’s report may include an Emphasis of Matter paragraph describing the circumstances and referring to, where relevant, disclosures that fully describe the matter that can be found in the financial report (see ASA 706).

Prior Period Financial Report Audited by a Predecessor Auditor (Ref: Para. 13)

An illustrative example of the auditor’s report if the prior period financial report was audited by a predecessor auditor and the auditor is not prohibited by law or regulation from referring to the predecessor auditor’s report on the corresponding figures is contained in Illustration 3 of Appendix 1.

Prior Period Financial Report Not Audited (Ref: Para. 14)

If the auditor is unable to obtain sufficient appropriate audit evidence regarding the opening balances, the auditor is required by ASA 705^[8] to express a qualified opinion or disclaim an opinion on the financial report, as appropriate, in accordance with ASA 705.  If the auditor encountered significant difficulty in obtaining sufficient appropriate audit evidence that the opening balances do not contain misstatements that materially affect the current period’s financial report, the auditor may determine this to be a key audit matter in accordance with ASA 701.^[9]

Comparative Financial Reports

In respect of audit engagements conducted under the Corporations Act 2001, the auditor’s opinion refers to a financial report for the current period, which include corresponding figures, and not to comparative financial report(s).  Consequently, paragraphs 15, 16, 17, 18 and 19, and related paragraphs A9, A10, A11, and A12 have no application to audit engagements under the Corporations Act 2001.

Reference in Auditor’s Opinion (Ref: Para. 15)

Because the auditor’s report on comparative financial reports applies to the financial report for each of the periods presented, the auditor may express a qualified opinion or an adverse opinion, disclaim an opinion, or include an Emphasis of Matter paragraph with respect to one or more periods, while expressing a different auditor’s opinion on the financial report of the other period.

An illustrative example of the auditor’s report if the auditor is required to report on both the current and the prior period financial reports in connection with the current year’s audit and the prior period included a modified opinion and the matter giving rise to the modification is unresolved, is contained in Illustration 4 of Appendix 1.

Opinion on the Prior Period Financial Report Different from Previous Opinion (Ref: Para. 16)

When reporting on the prior period financial report in connection with the current period’s audit, the opinion expressed on the prior period financial report may be different from the opinion previously expressed if the auditor becomes aware of circumstances or events that materially affect the financial report of a prior period during the course of the audit of the current period.  In some jurisdictions, the auditor may have additional reporting responsibilities designed to prevent future reliance on the auditor’s previously issued report on the prior period financial report.

Prior Period Financial Report not Audited (Ref: Para. 19)

If the auditor is unable to obtain sufficient appropriate audit evidence regarding the opening balances, the auditor is required by ASA 705 to express a qualified opinion or disclaim an opinion on the financial report, as appropriate, in accordance with ASA 705.   If the auditor encountered significant difficulty in obtaining sufficient appropriate audit evidence that the opening balances do not contain misstatements that materially affect the current period’s financial report, the auditor may determine this to be a key audit matter in accordance with ASA 701.

Prior Period Financial Report Audited by a Predecessor Auditor (Ref: Para. 18)

In respect of audit engagements conducted under the Corporations Act 2001, if the prior period auditor’s report on the prior period financial report is amended by a predecessor auditor during the current financial year, the auditor is unable to express an opinion in the current period auditor’s report in respect of that amendment. 

The predecessor auditor may be unable or unwilling to reissue the auditor’s report on the prior period financial report. An Other Matter paragraph of the auditor’s report may indicate that the predecessor auditor reported on the financial report of the prior period before amendment.

In addition, if the auditor is engaged to audit and obtains sufficient appropriate audit evidence to be satisfied as to the appropriateness of the amendment, the auditor’s report may also include the following paragraph:

As part of our audit of the 20X2 financial report, we also audited the adjustments described in Note X that were applied to amend the 20X1 financial report. In our opinion, such adjustments are appropriate and have been properly applied. We were not engaged to audit, review, or apply any procedures to the 20X1 financial report of the entity other than with respect to the adjustments and, accordingly, we do not express an opinion or any other form of assurance on the 20X1 financial report taken as a whole.