Advanced Audit and Assurance (International) · Auditor's reports

Structure and Content of the Auditor's Report under ISA 700

Updated 11 October 2026

ISA 700 (Revised) sets out the elements of an auditor's report. An unmodified report has a title, addressee, opinion, basis for opinion, key audit matters for listed entities, responsibilities sections, and signature, address and date. A going concern section appears only if a material uncertainty is adequately disclosed; if not, a qualified or adverse opinion follows under ISA 705.

Understand Structure and Content of the Auditor's Report

The auditor's report is the final product of the audit. Users rarely see the audit file. They see the report. ISA 700 (Revised) makes the report consistent so that users can tell what the auditor did, what they concluded and who is responsible for what.

The key idea is that the opinion comes first. After the title and addressee, the report opens with the Opinion section. It identifies the entity, names the financial statements audited, refers to the notes including material accounting policy information, and states the date or period covered. It then gives the opinion. For a fair presentation framework such as IFRS Accounting Standards, the wording is that the financial statements present fairly, in all material respects, or give a true and fair view. Which phrase applies depends on the framework and the law.

Next comes the Basis for Opinion. It states that the audit was conducted in accordance with International Standards on Auditing, refers to the section describing the auditor's responsibilities, states that the auditor is independent of the entity in accordance with relevant ethical requirements and has fulfilled its other ethical responsibilities in accordance with those requirements, and says the auditor believes the evidence obtained is sufficient and appropriate to provide a basis for the opinion.

The Opinion must come first, followed by the Basis for Opinion. ISA 700 allows flexibility in the order of the remaining sections. The order used here is the typical one. Some of these sections appear only when they apply. The typical order is Opinion, Basis for Opinion, Material Uncertainty Related to Going Concern, Key Audit Matters, Other Information, then the responsibilities sections.

A Material Uncertainty Related to Going Concern section (ISA 570) is included only when a material uncertainty exists and is adequately disclosed. If the disclosure is inadequate, the auditor gives a qualified or adverse opinion under ISA 705 instead. If there is no such uncertainty, there is no separate section. The standard going concern wording still appears in the responsibilities sections.
Key Audit Matters follow for listed entities (ISA 701).
Other Information (ISA 720) comes next.

After these come the Responsibilities of Management and Those Charged with Governance for the financial statements, and the Auditor's Responsibilities for the audit. These sections explain that management prepares the statements and assesses going concern, while the auditor obtains reasonable assurance and expresses an opinion. Reasonable assurance is high but not absolute.

The report ends with any Report on Other Legal and Regulatory Requirements, the name of the engagement partner (for listed entities, unless disclosure is reasonably expected to lead to a significant security threat), the signature of the firm or the auditor, the auditor's address and the date. The date must not be earlier than the date on which the auditor obtained sufficient appropriate evidence, including evidence that the financial statements have been prepared and that those with recognised authority have asserted responsibility for them. The date is the later of those two points. The report may be dated on the same day as approval, but not earlier. An unmodified opinion states that the financial statements present fairly, in all material respects (or give a true and fair view), in accordance with the applicable financial reporting framework.

Key rules to remember

Order of elements in an unmodified report: Title → Addressee → Opinion → Basis for Opinion → Material Uncertainty Related to Going Concern (only if a material uncertainty exists and is adequately disclosed) → Key Audit Matters (if required) → Other Information → Management and TCWG responsibilities → Auditor's responsibilities → Other legal and regulatory reporting → Partner name, signature, address, date; The Opinion section must come first after the title and addressee, followed by the Basis for Opinion. ISA 700 allows flexibility in the order of the later sections, so this is the typical order. Some items appear only when they apply.
Unmodified opinion wording (fair presentation): The financial statements present fairly, in all material respects (or give a true and fair view of) the financial position, performance and cash flows, in accordance with the applicable framework; Use the wording that matches the framework. Never mix the two phrases without reason.
Basis for Opinion content: ISAs followed + auditor's responsibilities section referenced + independence in accordance with relevant ethical requirements + other ethical responsibilities fulfilled in accordance with those requirements + sufficient appropriate evidence for the opinion; All five points are required.
Level of assurance: Reasonable assurance = high level, but not a guarantee; The auditor's responsibilities section must explain this.
Report date: Report date ≥ later of (date the auditor obtained sufficient appropriate evidence) and (date those with recognised authority asserted responsibility for the financial statements); The date cannot be earlier than this. The report may be dated on the same day as approval of the financial statements, but not earlier.

How to solve Structure and Content of the Auditor's Report questions

Most questions ask you to draft, review or criticise a report. This method works for all three.

1Read the requirement. Decide if you must draft the report, list the elements, or find errors in a given draft.
2Identify the entity type: listed or unlisted, and the framework. This decides whether key audit matters and the partner name are needed and which opinion wording applies.
3Check the scenario for matters that change the report, such as going concern doubts, misstatements or other information problems. If there are none, an unmodified opinion is expected.
4Work down the standard order. Title, addressee, opinion, basis, special sections, responsibilities, signature, address and date.
5For each section, apply the scenario. Use the entity name, the correct period end date and the statements actually audited.
6Check the date and signature. The date should not precede approval of the financial statements or the completion of evidence gathering.
7Add professional skills. Write clearly and concisely, give reasons, and state where the draft departs from ISA 700.

Quickest way: Order-and-tick method

When to use it: Use this when you have limited time or you must review a draft report for errors.

Write the elements down the page in order: title, addressee, opinion, basis, responsibilities, signature, address, date.
Tick each item that is present in the given draft and mark each missing or misplaced one.
Check the three most commonly wrong items: opinion before basis, independence statement present, and management versus auditor responsibilities not mixed up.
Check conditional items: key audit matters if listed, going concern section if relevant, partner name if listed.
Write each error with the ISA 700 requirement and one line of reasoning.

Common mistakes in Structure and Content of the Auditor's Report

Putting the Basis for Opinion before the Opinion.
Older report formats put the opinion last, so students copy that order.
Fix: Remember that ISA 700 (Revised) puts the Opinion first, followed by the Basis for Opinion.
Leaving out the independence and ethics statement in the Basis for Opinion.
Students focus on the ISA reference and forget the other required content.
Fix: Learn the parts of the basis section: ISAs, auditor's responsibilities, independence, other ethical responsibilities fulfilled in accordance with the relevant ethical requirements, and sufficient appropriate evidence.
Mixing up management's and the auditor's responsibilities.
Both groups deal with the financial statements, so the roles blur.
Fix: Management prepares the statements, maintains internal control and assesses going concern. The auditor expresses an opinion on them and obtains reasonable assurance.
Saying the auditor gives a guarantee or absolute assurance.
Students assume a clean opinion means the statements are free from all error.
Fix: State reasonable assurance, meaning a high but not absolute level, and that misstatements are material if they could influence users' decisions.
Dating the report before the financial statements were approved.
Students use the year-end date or the fieldwork end date.
Fix: Date the report no earlier than the later of the date the auditor obtained sufficient appropriate evidence and the date those with recognised authority asserted responsibility for the statements. The report may be dated the same day as approval, but not earlier.
Including key audit matters for every client without checking the entity type.
Students treat all sections as always required.
Fix: Key audit matters are required for listed entities. For other entities they may be communicated voluntarily or where law requires. Check the scenario first.

Worked examples

Example 1

Zenith Ltd is an unlisted company preparing statements under IFRS Accounting Standards. The audit found no material misstatements. State the main sections you would expect in the auditor's report, in order.

Show the solution

Zenith is unlisted, so key audit matters are not required. They would appear only if the auditor communicates them voluntarily or the law requires it.
There is no going concern uncertainty, so no separate material uncertainty section is needed. Standard going concern wording still appears in the responsibilities sections.
The report starts with the title, which includes the word independent, and the addressee.
Opinion section follows, naming the statements audited, the period end date and the unmodified opinion.
Then the Basis for Opinion with ISAs, independence and sufficient appropriate evidence.
Then the responsibilities of management and those charged with governance, followed by the auditor's responsibilities.
Finally the signature, address and date.

Answer: Title, addressee, Opinion, Basis for Opinion, Responsibilities of Management and TCWG, Auditor's Responsibilities, signature, address, date. Add key audit matters only for a listed entity, or if communicated voluntarily or required by law.

Example 2

A draft report for a listed company begins with the Basis for Opinion, contains no independence statement, has no partner name, and is dated one week before the board approved the financial statements. Identify the errors.

Show the solution

Order: the Opinion section must come first after the title and addressee, so the Basis for Opinion is in the wrong place.
Basis for Opinion: it must state that the auditor is independent of the entity in accordance with relevant ethical requirements. This is missing.
Listed entity: the name of the engagement partner is required unless disclosure is reasonably expected to lead to a significant security threat. It is missing.
Date: the report cannot be dated before the financial statements are approved. A date one week earlier is wrong.
Also check that key audit matters appear, as the entity is listed.

Answer: Errors: wrong order, missing independence statement, missing partner name, report dated before approval of the financial statements. Key audit matters should also be checked, as the entity is listed.

Exam tips

Learn the order of the report and write it as a checklist. Drafting and review questions both reward this.
Always state whether the entity is listed. It affects key audit matters and the partner name.
Use scenario facts such as the entity name and period end date in your answer. Generic answers lose professional skills marks.
When asked about responsibilities, split the answer into management and the auditor, and use reasonable assurance in the auditor part.
Link to related standards by name when a matter arises, for example ISA 570 for going concern and ISA 720 for other information.

Practice questions from Auditor's reports

Structure and Content of the Auditor's Report: frequently asked questions

What is the first section of an ISA 700 auditor's report?

After the title and addressee, the first section is the Opinion. The Basis for Opinion follows it. This order was introduced to give the opinion prominence.

Does every unmodified report include key audit matters?

No. ISA 701 requires them for listed entities. For other entities they may be communicated voluntarily or where required by law. Check the scenario to see which applies.

What does reasonable assurance mean in the report?

It is a high level of assurance, but not a guarantee. The auditor cannot examine everything, and some misstatements may remain undetected even when the audit is done in accordance with ISAs.

Who signs and dates the auditor's report?

The auditor or audit firm signs, and the auditor gives an address and a date. The date must not be earlier than the date the auditor obtained sufficient appropriate evidence, including evidence that the financial statements have been prepared and that those with recognised authority have asserted responsibility for them.