This Standard on Auditing (SA) deals with the auditor’s responsibilities relating to other information, whether financial or non-financial information (other than financial statements and the auditor’s report thereon), included in an entity’s annual report. An entity’s annual report may be a single document or a combination of documents that serve the same purpose.
governance in accordance with law, regulation or custom, the purpose of which is to provide owners (or similar stakeholders) with information on the entity’s operations and the entity’s financial results and financial position as set out in the financial statements. An annual report contains or accompanies the financial statements and the auditor’s report thereon and usually includes information about the entity’s developments, its future outlook and risks and uncertainties, a statement by the entity’s governing body, and reports covering governance matters. (Ref: Para. A1–A5)
22(e). (Ref: Para. A54–A58)
3 SA 705 (Revised), Modifications to the Opinion in the Independent Auditor’s Report.
report shall refer to Standards on Auditing only if the auditor’s report includes, at a minimum: (Ref: Para. A59)
A1. Law, regulation or custom may define the content of an annual report, and the name by which it is to be referred, for entities operating under the relevant law or regulation; however, the content and the name may vary from one law or regulation to another.
A2. An annual report is typically prepared on an annual basis. However, when the financial statements being audited are prepared for a period less than or more than a year, an annual report may also be prepared that covers the same period as the financial statements.
A3. In some cases, an entity’s annual report may be a single document and referred to by the title “annual report” or by some other title. In other cases, law, regulation or custom may require the entity to report to owners (or similar stakeholders) information on the entity’s operations and the entity’s financial results and financial position as set out in the financial statements (i.e., an annual4 SA 230, Audit Documentation, paragraphs 8–11.
report) by way of a single document, or by way of two or more separate documents that in combination serve the same purpose. For example, depending on the applicable law, regulation or custom, one or more of the following documents may form part of the annual report:
A4. An annual report may be made available to users in printed form, or electronically, including on the entity’s website. A document (or combination of documents) may meet the definition of an annual report, irrespective of the manner in which it is made available to users.
A5. An annual report is different in nature, purpose and content from other reports, such as a report prepared to meet the information needs of a specific stakeholder group or a report prepared to comply with a specific regulatory reporting objective (even when such a report is required to be publicly available). Examples of reports that, when issued as standalone documents, are not typically part of the combination of documents that comprise an annual report (subject to law, regulation or custom), and that, therefore, are not other information within the scope of this SA, include:
A6. When a particular matter is disclosed in the other information, the other information may omit or obscure information that is necessary for a proper understanding of that matter. For example, if the other information purports to address the key performance indicators used by management, then omission of a key performance indicator used by management could indicate that the other information is misleading.
A7. The concept of materiality may be discussed in a framework applicable to the other information and, if so, such a framework may provide a frame of reference for the auditor in making judgments about materiality under this SA. In many cases, however, there may be no applicable framework that includes a discussion of the concept of materiality as it applies to the other information. In such circumstances, the following characteristics provide the auditor with a frame of reference in determining if a misstatement of the other information is material:
A8. Appendix 1 contains examples of amounts or other items that may be included in the other information.
A9. In some cases, the applicable financial reporting framework may require specific disclosures but permit them to be located outside of the financial statements.5 As such disclosures are required by the applicable financial reporting framework, they form part of the financial statements. Accordingly, they do not constitute other information for the purpose of this SA.
5 For example, Ind AS 107, Financial Instruments: Disclosures, permits certain disclosures required by the Ind AS to either be given in the financial statements or incorporated by cross-reference from the financial statements to some other statement, such as a management commentary or business review report, that is available to users of the financial statements on the same terms as the financial statements and at the same time.
A10. eXtensible Business Reporting Language (XBRL) tags do not represent other information as defined in this SA.
A11. Determining the document(s) that is or comprises the annual report is often clear based on law, regulation or custom. In many cases, management or those charged with governance may have customarily issued a package of documents that together comprise the annual report, or may have committed to do so. In some cases, however, it may not be clear which document(s) is or comprises the annual report. In such cases, the timing and purpose of the documents (and for whom they are intended) are matters that may be relevant to the auditor’s determination of which document(s) is or comprises the annual report.
A12. When the annual report is translated into other languages pursuant to law or regulation (such as may occur when an entity voluntarily or is required by the relevant law or regulation to translate the annual report into another language), or when multiple “annual reports” are prepared under different legislation (for example, when an entity is listed in more than one jurisdictions), consideration may need to be given as to whether one, or more than one of the “annual reports” form part of the other information. Local law or regulation may provide further guidance in this respect.
A13. Management, or those charged with governance, is responsible for preparing the annual report. The auditor may communicate with management or those charged with governance:
A14. The communications referred to in paragraph A13 may be particularly appropriate for example:
A15. Where those charged with governance are to approve the other information prior to its issuance by the entity, the final version of such other information is the one that has been approved by those charged with governance for issuance.6
A16. In some cases, the entity’s annual report may be a single document to be released, in accordance with law or regulation or the entity’s reporting practice, shortly after the entity’s financial reporting period such that it is available to the auditor prior to the date of the auditor’s report. In other cases, such a document may not be required to be released until a later time, or at a time of the entity’s choosing. There may also be circumstances when the entity’s annual report is a combination of documents, each subject to different requirements or reporting practice by the entity with respect to the timing of their release.
A17. There may be circumstances when, at the date of the auditor’s report, the entity is considering the development of a document that may be part of the entity’s annual report (for example, a voluntary report to stakeholders) but management is unable to confirm to the auditor the purpose or timing of such a document. If the auditor is unable to ascertain the purpose or timing of such a document, the document is not considered other information for purposes of this SA.
A18. Obtaining the other information in a timely manner prior to the date of the auditor’s report enables any revisions that are found to be necessary to be made to the financial statements, the auditor’s report, or the other information prior to their issuance. The audit engagement letter7 may make reference to an agreement with management to make available to the auditor the other information in a timely manner, and if possible prior to the date of the auditor’s report.
A19. When other information is only made available to users via the entity’s website, the version of the other information obtained from the entity, rather than directly from the entity’s website, is the relevant document on which the auditor would perform procedures in accordance with this SA. The auditor has no responsibility under this SA to search for other information, including other information that may be on the entity’s website, nor to perform any procedures to confirm that other information is appropriately displayed on the entity’s website or otherwise has been appropriately transmitted or displayed electronically.
6 The auditor needs to be aware about the applicable provisions of the Companies Act, 2013 in relation to the availability of the other information (mainly the directors’ report and other report as approved by those charged with Governance) and obtain sufficient and appropriate audit evidence.
7 SA 210, Agreeing the Terms of Audit Engagements, paragraph A23.
A20. The auditor is not precluded from dating or issuing the auditor’s report if the auditor has not obtained some or all of the other information.
A21. When the other information is obtained after the date of the auditor’s report, the auditor is not required to update the procedures performed in accordance
with paragraphs 6 and 7 of SA 560.8
A22. SA 5809 establishes requirements and provides guidance on the use of written representations. The written representation required to be requested by paragraph 13(c) regarding other information that will be available only after the date of the auditor’s report is intended to support the auditor’s ability to complete the procedures required by this SA with respect to such information. In addition, the auditor may find it useful to request other written representations, for example, that:
A23. The auditor is required by SA 20010 to plan and perform the audit with professional skepticism. Maintaining professional skepticism when reading and considering the other information includes, for example, recognizing that management may be overly optimistic about the success of its plans, and being alert to information that may be inconsistent with:
A24. In accordance with SA 220,11 the engagement partner is required to take responsibility for the direction, supervision and performance of the audit engagement in compliance with professional standards and applicable legal and regulatory requirements. In the context of this SA, factors that may be taken into
8 SA 560, Subsequent Events.
9 SA 580, Written Representations.
10 SA 200, paragraph 15.
11 SA 220, Quality Control for an Audit of Financial Statements, paragraph 15(a).
account when determining the appropriate engagement team members to address the requirements of paragraphs 14–15, include:
A25. Other information may include amounts or other items that are intended to be the same as, to summarize, or to provide greater detail about, the amounts or other items in the financial statements. Examples of such amounts or other items may include:
A26. In evaluating the consistency of selected amounts or other items in the other information with the financial statements, the auditor is not required to compare all amounts or other items in the other information that are intended to be the same as, to summarize, or to provide greater detail about, the amounts or other items in the financial statements, with such amounts or other items in the financial statements.
A27. Selecting the amounts or other items to compare is a matter of professional judgment. Factors relevant to this judgment include:
amount or other item (for example, a key ratio or amount).
A28. Determining the nature and extent of procedures to address the requirement in paragraph 14(a) is a matter of professional judgment, recognizing that the auditor’s responsibilities under this SA do not constitute an assurance engagement on the other information or impose an obligation to obtain assurance about the other information. Examples of such procedures include:
A29. Evaluating the consistency of selected amounts or other items in the other information with the financial statements includes, when relevant given the nature of the other information, the manner of their presentation compared to the financial statements.
A31. The auditor’s knowledge obtained in the audit includes the auditor’s understanding of the entity and its environment, including the entity’s internal
control, obtained in accordance with SA 315.12 SA 315 sets out the auditor’s required understanding, which includes such matters as obtaining an understanding of:
A32. The auditor’s knowledge obtained in the audit may also include matters that are prospective in nature. Such matters may include, for example, business prospects and future cash flows that the auditor considered when evaluating the assumptions used by management in performing impairment tests on intangible assets such as goodwill, or when evaluating management’s assessment of the entity’s ability to continue as a going concern.
A33. In considering whether there is a material inconsistency between the other information and the auditor’s knowledge obtained in the audit, the auditor may focus on those matters in the other information that are of sufficient importance that a misstatement of the other information in relation to that matter could be material.
A34. In relation to many matters in the other information, the auditor’s recollection of the audit evidence obtained and conclusions reached in the audit may be sufficient to enable the auditor to consider whether there is a material inconsistency between the other information and the auditor’s knowledge obtained in the audit. The more experienced and the more familiar with the key aspects of the audit the auditor is, the more likely it is that the auditor’s
12 SA 315, Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment, paragraphs 11–12.
recollection of relevant matters will be sufficient. For example, the auditor may be able to consider whether there is a material inconsistency between the other information and the auditor’s knowledge obtained in the audit in light of the auditor’s recollection of discussions held with management or those charged with governance or findings from procedures carried out during the audit such as the reading of board minutes, without the need to take further action.
A35. The auditor may determine that referring to relevant audit documentation or making inquiries of relevant members of the engagement team or relevant component auditors is appropriate as a basis for the auditor’s consideration of whether a material inconsistency exists. For example:
A36. Whether, and if so the extent to which, the auditor refers to relevant audit documentation, or makes inquiries of relevant members of the engagement team or relevant component auditors is a matter of professional judgment. However, it may not be necessary for the auditor to refer to relevant audit documentation, or to make inquiries of relevant members of the engagement team or relevant component auditors about any matter included in the other information. The group auditor may request the management of thegroup to require the concerned component auditor to validate that part of the other information included in the annual report of the group that relates to the respective component.
A37. Other information may include discussion of matters that are not related to the financial statements and may also extend beyond the auditor’s knowledge obtained in the audit. For example, the other information may include statements about the entity’s greenhouse gas emissions.
A38. Remaining alert for other indications that the other information not related to the financial statements or the auditor’s knowledge obtained in the audit appears to be materially misstated assists the auditor in complying with relevant ethical requirements that require the auditor to avoid being associated with other information that the auditor believes contains a materially false or misleading statement, a statement furnished negligently, or omits or obscures any
necessary information such that the other information is misleading13. Remaining alert for other indications that the other information appears to be materially misstated could potentially result in the auditor identifying such matters as:
A39. The auditor’s discussion with management about a material inconsistency (or other information that appears to be materially misstated) may include requesting management to provide support for the basis of management’s statements in the other information. Based on management’s further information or explanations, the auditor may be satisfied that the other information is not materially misstated. For example, management explanations may indicate reasonable and sufficient grounds for valid differences of judgment.
A40. Conversely, the discussion with management may provide further information that supports the auditor’s conclusion that a material misstatement of the other information exists.
A41. It may be more difficult for the auditor to challenge management on matters of judgment than on those of a more factual nature. However, there may be circumstances where the auditor concludes that the other information contains a statement that is not consistent with the financial statements or the auditor’s knowledge obtained in the audit. These circumstances may raise doubt about the other information, the financial statements, or the auditor’s knowledge obtained in the audit.
A42. As there is a wide range of possible material misstatements of the other information, the nature and extent of other procedures the auditor may perform to conclude whether a material misstatement of the other information exists are matters of the auditor’s professional judgment in the circumstances.
13 ICAI’s Code of Ethics, paragraph 110.2.
A43. When a matter is unrelated to the financial statements or the auditor’s knowledge obtained in the audit, the auditor may not be able to fully assess management’s responses to the auditor’s inquiries. Nevertheless, based on management’s further information or explanations, or following changes made by management to the other information, the auditor may be satisfied that a material inconsistency no longer appears to exist or that the other information no longer appears to be materially misstated. When the auditor is unable to conclude that a material inconsistency no longer appears to exist or that the other information no longer appears to be materially misstated, the auditor may request management to consult with a qualified third party (for example, a management’s expert or legal counsel). In certain cases, after considering the responses from management’s consultation, the auditor may not be able to conclude whether or not a material misstatement of the other information exists. Actions the auditor may then take include one or more of the following:
A44. The actions the auditor takes if the other information is not corrected after communicating with those charged with governance are a matter of the auditor’s professional judgment. The auditor may take into account whether the rationale given by management and those charged with governance for not making the correction raises doubt about the integrity or honesty of management or those charged with governance, such as when the auditor suspects an intention to mislead. The auditor may also consider it appropriate to seek legal advice. In some cases, the auditor may be required by law, regulation or the professional standards to communicate the matter to a regulator.
Reporting Implications (Ref: Para. 18(a))
A45. In rare circumstances, a disclaimer of opinion on the financial statements may be appropriate when the refusal to correct the material misstatement of theother information casts such doubt on the integrity of management and those charged with governance as to call into question the reliability of audit evidence in general.
Withdrawal from the Engagement (Ref: Para. 18(b))
A46. Withdrawal from the engagement, where withdrawal is possible under applicable law or regulation, may be appropriate when the circumstances surrounding the refusal to correct the material misstatement of the other information cast such doubt on the integrity of management and those charged with governance as to call into question the reliability of representations obtained from them during the audit.
Considerations specific to certain entities (Ref: Para. 18(b))
A47. In case of certain entities, such as Central/State government and related government entities (for example agencies, board, commissions), withdrawal from the engagement may not be possible. In such cases, the auditor may issue a report to the legislature providing details of the matter or may take other appropriate actions.
A48. If the auditor concludes that a material misstatement exists in other information obtained after the date of the auditor’s report, and such a material misstatement has been corrected, the auditor’s procedures necessary in the circumstances include determining that the correction has been made (in accordance with paragraph 17(a)) and may include reviewing the steps taken by management to communicate with those in receipt of the other information, if previously issued, to inform them of the revision.
A49. If those charged with governance do not agree to revise the other information, taking appropriate action to seek to have the uncorrected misstatement appropriately brought to the attention of users for whom the auditor’s report is prepared requires the exercise of professional judgment, and may be affected by relevant law or regulation. Accordingly, the auditor may consider it appropriate to seek legal advice about the auditor’s legal rights and obligations.
A50. When a material misstatement of the other information remains uncorrected, appropriate actions that the auditor may take to seek to have the uncorrected material misstatement appropriately brought to the attention of usersfor whom the auditor’s report is prepared, when permitted by law or regulation, include, for example:
A51. In reading the other information, the auditor may become aware of new information that has implications for:
assessment.14
statements.15
The auditor’s responsibilities relating to subsequent events.16
A52. For an audit of financial statements of an unlisted corporate entity, the auditor may consider that the identification in the auditor’s report of other 14 SA 315, paragraphs 11, 31 and A1.
15 SA 450, Evaluation of Misstatements Identified during the Audit.
16 SA 560, paragraphs 10 and 14.
information that the auditor expects to obtain after the date of the auditor’s report would be appropriate in order to provide additional transparency about the other information that is subject to the auditor’s responsibilities under this SA. The auditor may consider it appropriate to do so, for example, when management is able to represent to the auditor that such other information will be issued after the date of the auditor’s report.
A54. A qualified or adverse auditor’s opinion on the financial statements may not have an impact on the statement required by paragraph 22(e) if the matter in respect of which the auditor’s opinion has been modified is not included or otherwise addressed in the other information and the matter does not affect any part of the other information. For example, a qualified opinion on the financial statements because of non-disclosure of directors’ remuneration as required by the applicable financial reporting framework may have no implications for the reporting required under this SA. In other circumstances, there may be implications for such reporting as described in paragraphs A55–A58.
Qualified Opinion Due to a Material Misstatement in the Financial Statements
A55. In circumstances when the auditor’s opinion is qualified, consideration may be given as to whether the other information is also materially misstated for the same matter as, or a related matter to, the matter giving rise to the qualified opinion on the financial statements.
Qualified Opinion Due to Limitation of Scope
A56. When there is a limitation of scope with respect to a material item in the financial statements, the auditor will not have obtained sufficient appropriate audit evidence about that matter. In these circumstances, the auditor may be unable to conclude whether or not the amounts or other items in the other information related to this matter result in a material misstatement of the other information. Accordingly, the auditor may need to modify the statement required by paragraph 22(e) to refer to the auditor’s inability to consider management’s description of the matter in the other information in respect of which the auditor’s opinion on the financial statements has been qualified as explained in the Basis for Qualified Opinion paragraph. The auditor is nevertheless required to report
any other uncorrected material misstatements of the other information that have been identified.
Adverse Opinion
A57. An adverse opinion on the financial statements relating to a specific matter(s) described in the Basis for Adverse Opinion paragraph does not justify the omission of reporting of material misstatements of the other information that the auditor has identified in the auditor’s report in accordance with paragraph 22(e)(ii). When an adverse opinion has been expressed on the financial statements, the auditor may need to appropriately modify the statement required by paragraph 22(e) for example, to indicate that amounts or items in the other information is materially misstated for the same matter as, or a related matter to, the matter giving rise to the adverse opinion on the financial statements.
Disclaimer of Opinion
A58. When the auditor disclaims an opinion on the financial statements, providing further details about the audit, including a section to address other information may overshadow the disclaimer of opinion on the financial statements as a whole. Accordingly, in those circumstances, as required by SA 705 (Revised), the auditor’s report does not include a section addressing the reporting requirements under this SA.
Paragraphs 21 and 22 of ISA 720(Revised) deal with reporting requirements on other information for listed entities and unlisted entities. In case of unlisted entities, Paragraph 21(b) of ISA 720(Revised) requires reporting on other information in situations where the auditor has obtained some or all of the other information at the date of the auditor’s report.
In India, there are large number of unlisted entities both corporates and non- corporates. Most of the unlisted non-corporate entities in India may not be required to issue annual reports containing other information under the applicable laws or regulations and some of these may issue annual reports as per custom or practice in relevant industry/sector. In the absence of legal and regulatory requirements regarding annual reports, there are practical difficulties for auditors to get any other information till the date of auditor’s report in case of unlisted non-corporates entities. Due to this reason, auditors would not be in a position to report on other information in case of unlisted non-corporate entities. To deal with aforesaid situation, Paragraph 21(b) of SA 720(Revised) has been modified to require reporting on other information in case of unlisted corporate entities only. Necessary change has also been made in paragraph A52 of SA 720(Revised).
Accordingly, the reporting requirements in SA 720(Revised) will not be applicable in case of unlisted non-corporate entities. However, it is clarified that all the other requirements in SA 720(Revised) will be equally applicable to audits of all unlisted entities.
For purposes of this illustrative auditor’s report, the following circumstances are assumed:
We have audited the standalone financial statements of ABC Company Limited (“the Company”), which comprise the balance sheet as at 31st March 20XX, and
the statement of profit and loss, (statement of changes in equity)21 and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information [in which are included the returns for the year ended on that date audited by the branch auditors of the company’s branches located at (location of
branches)]22.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 20XX, and its profit/loss, (changes in equity)23 and its cash flows for the year ended on that date.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
[Description of each key audit matter in accordance with SA 701.]
The Company’s Board of Directors is responsible for the other information. The other information comprises the [information included in the X report,25 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.
[Reporting in accordance with SA 700 (Revised)26–see Illustration 1 in SA 700 (Revised).]
[Reporting in accordance with SA 700 (Revised)–see Illustration 1 in SA 700 (Revised).]
24 The Key Audit Matters section is required for listed entities only.
25 A more specific description of the other information, such as “the management report and chairman’s statement,” may be used to identify the other information.26 SA 700 (Revised), Forming an Opinion and Reporting on Financial Statements.
We did not audit the financial statements/information of (number) branches included in the standalone financial statements of the Company whose financial statements / financial information reflect total assets of Rs. as at 31st March, 20XX and total revenues of Rs. for the year ended on that date, as considered in the standalone financial statements. The financial statements/information of these branches have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the report of such branch auditors.
Our opinion is not modified in respect of this matter.
Reporting in accordance with SA 700 (Revised)–see Illustration 1 in SA 700 (Revised).]
While reporting under Section 143(3) of the Companies Act, 2013, the auditor is required to suitably reword the wordings given in the Illustration in SA 700(Revised) to meet the circumstances of the audit.
The auditor has obtained part of the other information prior to the date of the auditor’s report, has not identified a material misstatement of the other information, and expects to obtain other information after the date of the auditor’s report.Those responsible for oversight of the financial statements differ from those responsible for the preparation of the financial statements.In addition to the audit of the financial statements, the auditor has other reporting responsibilities required under the Companies Act, 2013.
We have audited the standalone financial statements of ABC Company Limited (“the Company”), which comprise the balance sheet as at 31st March 20XX, and the statement of profit and loss, (statement of changes in equity)29 and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information [in which are included the returns for the year ended on that date audited by the branch auditors of the company’s branches located at (location of branches)]30.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 20XX, and its profit/loss, (changes in equity)31 and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
[Description of each key audit matter in accordance with SA 701.]
The Company’s Board of Directors is responsible for the other information. The other information comprises the X report32 (but does not include the financial statements and our auditor’s report thereon), which we obtained prior to the date of this auditor’s report, and the Y report, which is expected to be made available to us after that date.
Our opinion on the financial statements does not cover the other information and we do not and will 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 identified above 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 on the other information that we obtained prior to the date of this auditor’s report, 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.
[When we read the Y report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and [describe actions applicable under the applicable laws and regulations]]33
[Reporting in accordance with SA 700 (Revised)–see Illustration 1 in SA 700 (Revised).]
32 A more specific description of the other information, such as “the management report and chairman’s statement,” may be used to identify the other information.
33 This additional paragraph may be useful when the auditor has identified an uncorrected material misstatement of the other information obtained after the date of the auditor’s report and has a legal obligation to take specific action in response.
We did not audit the financial statements/information of (number) branches included in the standalone financial statements of the Company whose financial statements / financial information reflect total assets of Rs. as at 31st March, 20XX and total revenues of Rs. for the year ended on that date, as considered in the standalone financial statements. The financial statements/information of these branches have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the report of such branch auditors.
Our opinion is not modified in respect of this matter.
[Reporting in accordance with SA 700 (Revised) – see Illustration 1 in SA 700 (Revised).]
While reporting under Section 143(3) of the Companies Act, 2013, the auditor is required to suitably reword the wordings given in the Illustration in SA 700(Revised) to meet the circumstances of the audit.
the date of the auditor’s report, has not identified a material misstatement of the other information, and expects to obtain other information after the date of the auditor’s report.
Those responsible for oversight of the financial statements differ from those responsible for the preparation of the financial statements.
In addition to the audit of the financial statements, the auditor has other reporting responsibilities required under the Companies Act, 2013.
We have audited the standalone financial statements of ABC Company Limited (“the Company”), which comprise the balance sheet as at 31st March 20XX, and the statement of profit and loss, (statement of changes in equity)36 and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information [in which are included the returns for the year ended on that date audited by the branch auditors of the company’s branches located at (location of branches)]37.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 20XX, and its profit/loss, (changes in equity)38 and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
36 Where applicable.
37 Where applicable.
38 Where applicable.
Other Information [or another title if appropriate, such as “Information Other than the Financial Statements and Auditor’s Report Thereon”]
The Company’s Board of Directors is responsible for the other information. The other information obtained at the date of this auditor’s report is [information included in the X report,39 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 on the other information obtained prior to the date of this auditor’s report, 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.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
[Reporting in accordance with SA 700 (Revised)–see Illustration 1 in SA 700 (Revised).]
Auditor’s Responsibilities for the Audit of the Financial Statements
[Reporting in accordance with SA 700 (Revised) – see Illustration 1 in SA 700 (Revised).]
Other Matter40
We did not audit the financial statements/information of (number) branches included in the standalone financial statements of the Company whose financial statements / financial information reflect total assets of Rs. _ as at 31st March, 20XX and total revenues of Rs. for the year ended on that date, as considered in the standalone financial statements. The financial statements/information of these branches have been audited by the branch 39 A more specific description of the other information, such as “the management report and chairman’s statement,” may be used to identify the other information.
40 Where applicable. auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the report of such branch auditors.
Our opinion is not modified in respect of this matter.
[Reporting in accordance with SA 700 (Revised) – see Illustration 1 in SA 700 (Revised).]
While reporting under Section 143(3) of the Companies Act, 2013, the auditor is required to suitably reword the wordings given in the Illustration in SA 700(Revised) to meet the circumstances of the audit.
For purposes of this illustrative auditor’s report, the following circumstances are assumed:
We have audited the standalone financial statements of ABC Company Limited (“the Company”), which comprise the balance sheet as at 31st March 20XX, and the statement of profit and loss, (statement of changes in equity)42 and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information [in which are included the returns for the year ended on that date audited by the branch auditors of the Company’s branches located at (location of branches)]43.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 20XX, and its profit/loss, (changes in equity)44 and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters are those matters that, in our professional judgment, were of
42 Where applicable.
43 Where applicable.
44 Where applicable.
most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
[Description of each key audit matter in accordance with SA 701.]
The Company’s Board of Directors is responsible for the other information. The other information comprises the [information included in the X report45, but does not include the financial statements and our auditor’s report thereon]. The X report is expected to be made available to us after the date of this auditor’s report.
Our opinion on the financial statements does not cover the other information and we will 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 identified above when it becomes available 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.
[When we read the X report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and(describe actions applicable in the applicable laws and regulations).]46
[Reporting in accordance with SA 700 (Revised)–see Illustration 1 in SA 700 (Revised).]
[Reporting in accordance with SA 700 (Revised)–see Illustration 1 in SA 700 (Revised).]
45 A more specific description of the other information, such as “the management report and chairman’s statement,” may be used to identify the other information.
46 This additional paragraph may be useful when the auditor has identified an uncorrected material misstatement of the other information obtained after the date of the auditor’s report and has a legal obligation to take specific action in response.
We did not audit the financial statements/information of (number) branches included in the standalone financial statements of the Company whose financial statements / financial information reflect total assets of Rs. as at 31st March, 20XX and total revenues of Rs. for the year ended on that date, as considered in the standalone financial statements. The financial statements/information of these branches have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the report of such branch auditors.
Our opinion is not modified in respect of this matter.
[Reporting in accordance with SA 700 (Revised)–see Illustration 1 in SA 700 (Revised).]
While reporting under Section 143(3) of the Companies Act, 2013, the auditor is required to suitably reword the wordings given in the Illustration in SA 700(Revised) to meet the circumstances of the audit.
For purposes of this illustrative auditor’s report, the following circumstances are assumed:
We have audited the standalone financial statements of ABC Company Limited (“the Company”), which comprise the balance sheet as at 31st March 20XX, and the statement of profit and loss, (statement of changes in equity)49 and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information [in which are included the returns for the year ended on that date audited by the branch auditors of the Company’s branches located at (location of
branches)]50.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 20XX, and its profit/loss, (changes in equity)51 and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
The Company’s Board of Directors is responsible for the other information. The
49 Where applicable.
50 Where applicable.
51 Where applicable.
other information comprises the [information included in the X report52, 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. As described below, we have concluded that such a material misstatement of the other information exists.
[Description of material misstatement of the other information]
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
[Description of each key audit matter in accordance with SA 701.]
[Reporting in accordance with SA 700 (Revised)–see Illustration 1 in SA 700 (Revised).]
[Reporting in accordance with SA 700 (Revised)–see Illustration 1 in SA 700 (Revised).]
We did not audit the financial statements/information of (number) branches included in the standalone financial statements of the Company whose
financial statements / financial information reflect total assets of Rs. as at 31stMarch, 20XX and total revenues of Rs. for the year ended on that date, as considered in the standalone financial statements. The financial statements/information of these branches have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the report of such branch auditors.
Our opinion is not modified in respect of this matter.
[Reporting in accordance with SA 700 (Revised)–see Illustration 1 in SA 700 (Revised).]
While reporting under Section 143(3) of the Companies Act, 2013, the auditor is required to suitably reword the wordings given in the Illustration in SA 700(Revised) to meet the circumstances of the audit.
For purposes of this illustrative auditor’s report, the following circumstances are assumed:
We have audited the accompanying consolidated financial statements of ABC Company Limited (hereinafter referred to as the “Holding Company”) and its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”), its associates and jointly controlled entities, which comprise the consolidated balance sheet as at March 31, 20XX, and the consolidated statement of profit and loss, (consolidated statement of changes in equity)56 and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies (hereinafter referred to as “the consolidated financial statements”).
In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group, its associates and jointly controlled entities, as at March 31, 20XX, consolidated profit/loss, (consolidated changes in equity)57 and consolidated cash flows for the year then ended.
The Group’s investment in XYZ Company, a foreign associate acquired during the year and accounted for by the equity method, is carried at Rs. XXX on the consolidated balance sheet as at March 31, 20XX, and ABC’s share of XYZ’s net income of Rs. XXX is included in ABC’s income for the year then ended. We
56 Where applicable.
57 Where applicable.
were unable to obtain sufficient appropriate audit evidence about the carrying amount of ABC’s investment in XYZ as at March 31, 20XX and ABC’s share of XYZ’s net income for the year because we were denied access to the financial information, management, and the auditors of XYZ. Consequently, we were unable to determine whether any adjustments to these amounts were necessary.
We conducted our audit in accordance with Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group and its associates and jointly controlled entities in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in India in terms of the Code of Ethics issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 2013, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.
The company’s Board of Directors is responsible for the other information. The other information comprises the [information included in the X report58, but does not include the consolidated financial statements and our auditor’s report thereon.]
Our opinion on the consolidated 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 consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated 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. As described in the Basis for Qualified Opinion section above, we were unable to 58 A more specific description of the other information, such as “the management report and chairman’s statement,” may be used to identify the other information.
obtain sufficient appropriate audit evidence about the carrying amount of ABC’s investment in XYZ as at March 31, 20XX and ABC’s share of XYZ’s net income for the year. Accordingly, we are unable to conclude whether or not the other information is materially misstated with respect to this matter.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Basis for Qualified Opinion section, we have determined the matters described below to be the key audit matters to be communicated in our report.
[Description of each key audit matter in accordance with SA 701.]
[Reporting in accordance with SA 700 (Revised)–see Illustration 2 in SA 700 (Revised).]
[Reporting in accordance with SA 700 (Revised)–see Illustration 2 in SA 700 (Revised).]
Other Matters
subsidiaries, and jointly controlled entities, whose financial
statements / financial information reflect total assets of Rs. as at 31st March, 20XX, total revenues of Rs. and net cash flows amounting to Rs. for the year ended on that date, as considered in the consolidated financial statements. The consolidated financial statements also include the Group’s share of net profit/loss of Rs. for the year ended 31st March, 20XX, as considered in the consolidated financial statements, in respect of associates, whose financial statements / financial information have not been audited by us. These financial
59 The Key Audit Matters section is required for listed entities only.
statements / financial information have been audited by other auditors whose reports have been furnished to us by the management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, jointly controlled entities and associates, and our report in terms of sub-section (3) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries, jointly controlled entities and associates, is based solely on the reports of the other auditors.
subsidiaries and jointly controlled entities, whose financial
statements / financial information reflect total assets of Rs. as at 31st March, 20XX, total revenues of Rs. and net cash flows amounting to Rs. for the year ended on that date, as considered in the consolidated financial statements. The consolidated financial statements also include the Group’s share of net profit/loss of Rs. for the year ended 31st March, 20XX, as considered in the consolidated financial statements, in respect of associates, whose financial statements / financial information have not been audited by us. These financial statements / financial information are unaudited and have been furnished to us by the management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, jointly controlled entities and associates, and our report in terms of sub-section (3) of Section 143 of the Act in so far as it relates to the aforesaid subsidiaries, jointly controlled entities and associates, is based solely on such unaudited financial statements / financial information. In our opinion and according to the information and explanations given to us by the management, these financial statements / financial information are not material to the Group.
Our opinion on the consolidated financial statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements / financial information certified by the management.
For purposes of this illustrative auditor’s report, the following circumstances are assumed:
To the Members of ABC Company Limited
We have audited the accompanying consolidated financial statements of ABC Company Limited (hereinafter referred to as the “Holding Company”) and its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”), its associates and jointly controlled entities, which comprise the consolidated balance sheet as at March 31, 2XXX, the consolidated statement of profit and loss, (consolidated statement of changes in equity)61 and the consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies (hereinafter referred to as the “consolidated financial statements”).
In our opinion and to the best of our information and according to the explanations given to us, because of the significance of the matter discussed in the Basis for Adverse Opinion section of our report, the accompanying consolidated financial statements do not give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group, its associates and jointly controlled entities, as at March 31, 20XX, of its consolidated profit/loss, (consolidated position of changes in equity)62 and the consolidated cash flows for the year then ended.
As explained in Note X, the Group has not consolidated subsidiary XYZ Company that the Group acquired during 20XX because it has not yet been able
61Where applicable.
62Where applicable.
to determine the fair values of certain of the subsidiary’s material assets and liabilities at the acquisition date. This investment is therefore accounted for on a cost basis. Under the accounting principles generally accepted in India, the Group should have consolidated this subsidiary and accounted for the acquisition based on provisional amounts. Had XYZ Company been consolidated, many elements in the accompanying consolidated financial statements would have been materially affected. The effects on the consolidated financial statements of the failure to consolidate have not been determined.
We conducted our audit in accordance with Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group and its associates and jointly controlled entities in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in India in terms of the Code of Ethics issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 2013, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our adverse opinion.
The company’s Board of Directors is responsible for the other information. The other information comprises the [information included in the X report63, but does not include the consolidated financial statements and our auditor’s report thereon.]
Our opinion on the consolidated 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 consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
63 A more specific description of the other information, such as “the management report and chairman’s statement,” may be used to identify the other information.
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. As described in the Basis for Adverse Opinion section above, the Group should have consolidated XYZ Company and accounted for the acquisition based on provisional amounts. We have concluded that the other information is materially misstated for the same reason with respect to the amounts or other items in the X report affected by the failure to consolidate XYZ Company.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Basis for Adverse Opinion section we have determined the matters described below to be the key audit matters to be communicated in our report.
[Description of each key audit matter in accordance with SA 701.]]
[Reporting in accordance with SA 700 (Revised)–see Illustration 2 in SA 700 (Revised).]
[Reporting in accordance with SA 700 (Revised)–see Illustration 2 in SA 700 (Revised).]
subsidiaries, and jointly controlled entities, whose financial
statements / financial information reflect total assets of Rs. as at 31st March, 20XX, total revenues of Rs. and net cash flows amounting to Rs. for the year ended on that date, as considered in the consolidated financial statements. The consolidated financial statements also include the Group’s share of net profit/loss of Rs. for the year
64 The Key Audit Matters section is required for listed entities only.
ended 31st March, 20XX, as considered in the consolidated financial statements, in respect of associates, whose financial statements / financial information have not been audited by us. These financial statements / financial information have been audited by other auditors whose reports have been furnished to us by the management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, jointly controlled entities and associates, and our report in terms of sub-section (3) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries, jointly controlled entities and associates, is based solely on the reports of the other auditors.
subsidiaries and jointly controlled entities, whose financial
statements / financial information reflect total assets of Rs. as at 31st March, 20XX, total revenues of Rs. and net cash flows amounting to Rs. for the year ended on that date, as considered in the consolidated financial statements. The consolidated financial statements also include the Group’s share of net profit/loss of Rs. for the year ended 31st March, 20XX, as considered in the consolidated financial statements, in respect of associates, whose financial statements / financial information have not been audited by us. These financial statements / financial information are unaudited and have been furnished to us by the management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, jointly controlled entities and associates, and our report in terms of sub-section (3) of Section 143 of the Act in so far as it relates to the aforesaid subsidiaries, jointly controlled entities and associates, is based solely on such unaudited financial statements/financial information. In our opinion and according to the information and explanations given to us by the Management, these financial statements / financial information are not material to the Group.
Our opinion on the consolidated financial statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements / financial information certified by the Management.