Acca aa s21 Notes

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7. Example of disclaimer of opinion
Here is a modified opinion arising from a lack of sufficient appropriate audit evidence but which is 
leading to disclaimer of opinion because multiple elements of the financial statements are affected.
Disclaimer of Opinion (extract)
We were engaged to audit ...
We do not express an opinion on the accompany financial statements. Because of the 
significance of the matter described in the 
Basis for Disclaimer of Opinion
section of our report, 
we have not be able to obtain sufficient appropriate audit evidence to provide a basis for an 
audit opinion on these financial statements.
Basis for Disclaimer of Opinion (extracts)
We were not appointed as auditors of the Company until [date] and thus did not observe the 
physical inventory counts at the beginning and end of the year...
In addition, the introduction of a new computerised system in [date] resulted in numerous 
errors in accounts receivable. As at the date of this report ...
8. Material misstatement/‘except for’
Here is an example of a qualified opinion arising from a material misstatement about something in 
the financial statements. Here the problem is that no depreciation has been provided when it should 
have been. Note, where there is a material misstatement auditors will normally be able to quantify its 
extent and the effect on the profits and this is useful information for the primary users of the financial 
statements. Here the amount of depreciation in dispute is material, but the financial statements as a 
whole are presented fairly.