Skip to content

Advanced Auditing, Assurance and Professional Ethics · Reporting

Auditor's Report Format and Elements under SA 700

Updated 5 October 2026

SA 700 (Revised) governs how an auditor forms an opinion and the layout of the report on general purpose financial statements. The report runs: title, addressee, Opinion, Basis for Opinion, conditional sections, responsibilities, other reporting, then signature, place and date. In India, membership number and UDIN are added under ICAI and Companies Act requirements. Apply each element to the facts.

Understand Auditor's Report Format and Elements under SA 700

The auditor's report is the final product of the audit. Users read it to learn whether the financial statements give a true and fair view (or are presented fairly) under the applicable financial reporting framework. SA 700 (Revised) fixes the layout so that reports are consistent and readers can compare them.

The auditor's report must be in writing, and it must carry a title clearly indicating that it is the report of an independent auditor. It is addressed as required by the engagement circumstances, for a company usually to the members. The Opinion section is the first section of the report body, after the title and addressee. It identifies the entity, the statements audited, the notes including significant accounting policies, and the date or period covered. It then states the opinion.

The Basis for Opinion section comes next. It says the audit was conducted under the Standards on Auditing, refers to the section describing the auditor's responsibilities, states that the auditor is independent under the relevant ethical requirements (for India, the ICAI Code of Ethics), and says the evidence obtained is sufficient and appropriate to support the opinion. Placing the basis straight after the opinion helps the reader see what supports it.

After this come sections as applicable: material uncertainty related to going concern, Key Audit Matters (SA 701 requires them for audits of complete sets of general purpose financial statements of listed entities, and otherwise when the auditor decides to communicate them or the law requires it), emphasis of matter or other matter paragraphs (SA 706), and other information (SA 720). Then follow the responsibilities of management and those charged with governance, and the auditor's responsibilities for the audit.

Finally comes the section on Report on Other Legal and Regulatory Requirements, where the Companies Act and CARO reporting sits for Indian companies. The report ends with the auditor's signature, the place of signing (the auditor's address) and the date. These are the elements SA 700 prescribes for the close of the report.

In India, the membership number (and firm registration number for a firm) is also given under the Companies Act and ICAI requirements. The UDIN is required by ICAI directive. It is not an element prescribed by SA 700, but you keep it in the signature block as an ICAI requirement.

The date must not be earlier than the date on which the auditor has obtained sufficient appropriate audit evidence on which to base the opinion. That evidence includes evidence that those with recognised authority (for a company, the Board) have asserted that they have taken responsibility for the financial statements.

Key rules to remember

Order of sections (typical)
Title → Addressee → Opinion → Basis for Opinion → Going Concern / KAM / EOM-OMP / Other Information (as applicable) → Responsibilities of Management and TCWG → Auditor's Responsibilities → Other Legal and Regulatory Requirements → Signature, place, date (SA 700) + membership no., firm registration no. and UDIN (Companies Act / ICAI)
Learn the sequence. The Opinion is the first section of the report body, after the title and addressee, and Basis for Opinion follows directly after it. UDIN is required by ICAI directive. It is not an SA 700 element, but it sits in the signature block.
Unmodified opinion wording
"give a true and fair view" (or "present fairly, in all material respects") in accordance with the applicable financial reporting framework
For a fair presentation framework, the opinion states that the financial statements give a true and fair view or present fairly, in all material respects. For a compliance framework, it states that they are prepared, in all material respects, in accordance with the framework. Under the Companies Act, true and fair view is used.
Content of Basis for Opinion
Audit per SAs + reference to auditor's responsibilities section + independence and ethical requirements + sufficient appropriate evidence for opinion
All four points are expected in a full answer.
Date of report
Date of report ≥ date on which sufficient appropriate audit evidence for the opinion was obtained, including evidence that those with recognised authority have asserted responsibility for the financial statements
For a company, those with recognised authority are the Board. The date tells the reader the auditor has considered events up to that date.
KAM definition
KAM = matters of most significance in the audit of the current period, chosen from matters communicated with those charged with governance
KAMs are not a substitute for a modified opinion and do not replace required disclosures.

How to solve Auditor's Report Format and Elements under SA 700 questions

Use this method for any question that asks you to draft, correct or evaluate an auditor's report.

  1. 1Read the facts and identify the entity type (listed or unlisted, company or other) and the framework.
  2. 2Decide the type of opinion needed. If the facts show a modification, link to SA 705 and write the Basis for Qualified, Adverse or Disclaimer heading. A matter giving rise to a modified opinion is, by its nature, a key audit matter, but it is not described in the KAM section. It is described in the Basis for Modified Opinion section, and the KAM section may refer to that section.
  3. 3List the required sections in order, starting with title, addressee, Opinion and Basis for Opinion.
  4. 4Add conditional sections: going concern, KAM, EOM or OMP, other information, based on the facts.
  5. 5Include the responsibilities of management and the auditor, in line with the SA 700 format.
  6. 6Add the section on other legal and regulatory requirements, with CARO and Companies Act matters where relevant.
  7. 7Finish with the auditor's signature, place and date (SA 700). Then add the membership number, firm registration number and UDIN as Companies Act and ICAI requirements.
  8. 8State your conclusion in provision, facts, conclusion form, naming what is missing or wrongly placed.

Quickest way: Checklist of eight blocks

When to use it: Use when a question asks you to identify missing or misplaced elements in a given draft report and time is short.

  1. Tick off title, addressee, Opinion, Basis for Opinion.
  2. Check the order. Opinion is the first section of the body after the title and addressee, and Basis comes straight after it.
  3. Check for conditional sections the facts call for (going concern, KAM, EOM).
  4. Check management and auditor responsibility sections.
  5. Check the section on other legal and regulatory requirements.
  6. Check signature, place and date (SA 700). Then check membership number, firm registration number and UDIN (Companies Act and ICAI requirements).
  7. Check the date is not before the auditor obtained sufficient appropriate evidence, including the Board's assertion that it has taken responsibility for the statements.
  8. Write each gap as one line: element, requirement, what is wrong.

Common mistakes in Auditor's Report Format and Elements under SA 700

  • Placing Basis for Opinion before the Opinion section.

    Students think evidence should come before the conclusion.

    Fix: Remember that SA 700 (Revised) puts Opinion first, then Basis for Opinion.

  • Omitting the independence statement in the Basis for Opinion.

    Students focus on the SAs reference and forget the ethics element.

    Fix: Include independence under the relevant ethical requirements (ICAI Code of Ethics) and fulfilment of other ethical responsibilities.

  • Treating KAM as required for every audit.

    Students overgeneralise from listed company reports.

    Fix: State that SA 701 applies to complete sets of general purpose financial statements of listed entities, and otherwise when the auditor decides to communicate KAMs or the law requires it.

  • Using a KAM to handle a matter that needs a modified opinion.

    KAM looks like a softer way to flag a problem.

    Fix: Say that a matter giving rise to a modified opinion is, by its nature, a key audit matter, but it is not described in the KAM section. It is described in the Basis for Modified Opinion section (SA 705), and the KAM section may refer to that section.

  • Dating the report before those with recognised authority have taken responsibility for the financial statements.

    Students date it when fieldwork ends.

    Fix: The report date cannot be earlier than the date on which sufficient appropriate evidence was obtained, including evidence that those with recognised authority (for a company, the Board) have asserted responsibility for the financial statements.

  • Mixing up statements audited with the report on other legal requirements.

    Both deal with compliance.

    Fix: Keep the financial statement opinion separate from the section on Companies Act and CARO matters, and head each clearly.

Worked examples

Example 1

Case: The draft report of a listed company, Sunrise Ltd, begins with Basis for Opinion, then Opinion, and then the responsibilities sections. It has no Key Audit Matters section and no statement that there are no key audit matters to communicate, although the auditor discussed inventory valuation with those charged with governance as a matter needing significant audit attention. The report is signed with the firm name and date only. Identify the deficiencies.

Show the solution
  1. Provision: SA 700 (Revised) requires Opinion first, followed by Basis for Opinion.
  2. Facts: The draft starts with Basis for Opinion. The order is wrong.
  3. Provision: For a listed entity, SA 701 requires the report to either include a KAM section describing the KAMs, or state that there are no KAMs to communicate. The auditor determines KAMs from the matters communicated with those charged with governance that required significant auditor attention, and then decides which were of most significance.
  4. Facts: Sunrise Ltd is listed, and the draft has neither a KAM section nor a statement that there are no KAMs. That absence is the deficiency. Inventory valuation was discussed with those charged with governance as needing significant audit attention, so it is a likely KAM, subject to the auditor's judgement.
  5. Provision: SA 700 prescribes the auditor's signature, the auditor's address (place) and the date. Separately, the Companies Act and ICAI require the membership number, the firm registration number (for a firm) and the UDIN.
  6. Facts: Only the firm name and date are given. The place is missing, which SA 700 requires. The membership number, firm registration number and UDIN are also missing, which the Companies Act and ICAI require.

Answer: The report has three deficiencies: wrong order of Opinion and Basis for Opinion, no KAM section and no statement that there are no KAMs although the entity is listed (inventory valuation is a likely KAM), and an incomplete signature block. The auditor should place Opinion first, include either a KAM section after determining the KAMs or a statement that there are none, and complete the block: signature, place and date under SA 700, plus membership number, firm registration number and UDIN under Companies Act and ICAI requirements.

Example 2

Case: Priya, an auditor of Meru Pvt Ltd (unlisted), finishes fieldwork on 10 May. The board approves the financial statements on 18 May. Priya signs her report dated 10 May. She also includes a KAM section though she did not intend to communicate KAMs and the law does not require it for this entity. Comment.

Show the solution
  1. Provision: The date of the report must not be earlier than the date on which the auditor obtained sufficient appropriate evidence, including evidence that those with recognised authority (here, the Board) have asserted responsibility for the financial statements.
  2. Facts: Board approval was on 18 May. Dating the report 10 May is earlier than that.
  3. Conclusion on date: The report cannot be dated earlier than 18 May. The Board's approval is only one part of the evidence, so the report should carry the date on which Priya has obtained all sufficient appropriate evidence, including that approval. Normally she signs on or after the Board's approval.
  4. Provision: KAM communication is required for listed entities, and an auditor may choose to communicate KAMs for other entities or where law requires.
  5. Facts: Meru Pvt Ltd is unlisted. Including a KAM section is not required, but it is not prohibited if the auditor chooses to do so.
  6. Conclusion on KAM: Including it is not an error as such. If included, it must follow SA 701 fully.

Answer: The date of 10 May is wrong; the report cannot be dated earlier than 18 May. It should be dated the day Priya has obtained all sufficient appropriate evidence, including the Board's approval, which normally means signing on or after 18 May. The KAM section is not mandatory for an unlisted company, but is permitted if the auditor chooses to communicate it in line with SA 701.

Exam tips

  • In written answers, name each element by its SA 700 heading. Examiners reward the exact headings and their order.
  • For case-scenario MCQs, first check order and dating issues. These are the easiest errors to spot.
  • Link modified opinions to SA 705, KAM to SA 701, EOM and OMP to SA 706 and other information to SA 720, in one line each.
  • When asked about the date, state the limit: not before sufficient appropriate evidence was obtained, including evidence that those with recognised authority (for a company, the Board) have asserted responsibility for the financial statements.
  • For other reporting responsibilities, state that Companies Act and CARO matters go in a separate section and do not mix with the financial statement opinion.

Practice questions from Reporting

Auditor's Report Format and Elements under SA 700: frequently asked questions

What are the main elements of the auditor's report under SA 700?

They are title, addressee, Opinion, Basis for Opinion, going concern and KAM sections where applicable, responsibilities of management and the auditor, other legal and regulatory requirements, and the closing signature, place and date. In India the signature block also carries the membership number and firm registration number (Companies Act and ICAI requirements) and the UDIN (ICAI directive). These are not SA 700 elements.

What goes in the Basis for Opinion paragraph?

It states the audit was done under the Standards on Auditing and refers to the auditor's responsibilities section. It also states independence under the ICAI Code of Ethics and that sufficient appropriate evidence was obtained to support the opinion.

Why does the Opinion section come before the Basis for Opinion?

SA 700 (Revised) puts the conclusion first so users see it immediately. The Basis for Opinion follows to explain what supports it.

Is the Key Audit Matters section needed in every report?

No. SA 701 requires it for audits of complete sets of general purpose financial statements of listed entities. For other entities, it is included where the auditor decides to communicate KAMs or the law requires it. A matter that gives rise to a modified opinion is, by its nature, a key audit matter, but it is not described in the KAM section. It is described in the Basis for Modified Opinion section, and the KAM section may refer to that section.