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

Zeta Ltd is a listed company. The audit of its financial statements for the year ended 31 December 20X5 is complete and the auditor has concluded that the financial statements are free from material misstatement. Which of the following describes the correct position on the structure of the auditor's report under ISA 700 (Revised)?

The opinion section must come first, directly after the title and addressee, followed by the basis for opinion. ISA 700 (Revised) requires this order to give the opinion prominence. Key audit matters and responsibilities sections follow later in the report.

  1. AThe opinion section must appear first, immediately after the title and addressee, followed by the basis for opinion sectionCorrect
  2. BThe basis for opinion section must appear first so readers understand the evidence before reading the opinion
  3. CThe auditor's responsibilities section must appear before the opinion to explain the audit approach
  4. DThe key audit matters section must appear before the opinion for listed entities

Explanation

ISA 700 (Revised) requires the report to begin with the opinion section, followed by the basis for opinion. Placing other sections first would contradict this prominence requirement. KAM comes later, after the basis for opinion (and any going concern section).

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