Ministry of Justice
On January 31, 2019 No. 53639
Appendix No. 32
to the Order of the Ministry of Finance of the Russian Federation of January 9, 2019 No. 2n
The International Standard of Audit (ISA) 705 (reviewed) "The modified opinion in audit opinion" should be considered together with MCA 200 "Main objectives of the independent auditor and carrying out audit according to International standards of audit".
Scope of this standard
1. This International Standard of Audit (ISA) establishes the auditor's obligations on release of the proper conclusion in circumstances when when forming opinion according to MCA 700 (reviewed) <1> auditor comes to conclusion about need of expression of the modified opinion on the financial reporting. In this MSA the question of how expression by the auditor of the modified opinion influences form and content of audit opinion is also considered. In all cases in this standard the requirements to creation of audit opinions containing in MCA 700 (reviewed) are applied, at the same time the specified requirements do not repeat, except cases when they are directly considered or adjusted proceeding from requirements of this standard.
<1> MCA 700 (reviewed) "Forming of opinion and creation of the conclusion about the financial reporting".
Types of the modified opinion
2. This standard determines three types of the modified opinion, namely: opinion with clause, negative opinion and refusal of opinion expression. The decision on what type of the modified opinion is proper, depends:
(a) from the question design which formed the basis for expression of the modified opinion that is whether there are essential misstatements in the financial reporting or, in case of impossibility to obtain sufficient competent auditor evidences whether there is probability of availability of such essential misstatements;
(b) judgments of the auditor concerning comprehensive nature of influence, including possible, such question on the financial reporting (see Item A 1).
The effective date
3. This standard becomes effective concerning financial records audit for the periods which are coming to an end on December 15, 2016 or after this date.
4. The purpose of the auditor is accurate expression of properly modified opinion on the financial reporting which is necessary if:
(a) based on the obtained auditor evidence the auditor comes to conclusion that the financial reporting considered in general contains essential misstatements, or
(b) the auditor cannot obtain sufficient competent auditor evidences to draw conclusion that the financial reporting considered in general does not contain essential misstatements.
5. For the purposes of International standards of audit the following terms have the stated below values:
(a) comprehensive - the term is used in relation to misstatements for the description of the impact exerted by misstatements on the financial reporting or possible influence on the financial reporting of misstatements if such are available which remain undetected owing to impossibility to obtain sufficient competent auditor evidences. The impact exerted on the financial reporting is considered comprehensive if, according to the auditor, it:
(i) it is not limited to separate elements, accounts or financial statement line items;
(ii) mentions or can mention essential part of the financial reporting if influence is limited to separate elements, or
(iii) has paramount value for understanding of the financial reporting its users in respect of disclosure of information;
(b) the modified opinion - opinion with clause, negative opinion or refusal of expression of opinion on the financial reporting.
The circumstances requiring expression of the modified opinion of the auditor
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