Question: A sample audit report is provided in
A sample audit report is provided in figure 1.3 in this chapter. A sample review engagement report is provided in figure 1.4.
Required:
a. What is the auditor’s responsibility as determined in the audit report?
b. Find the lines in the audit report that express the auditor’s opinion. Is it an unqualified or modified audit opinion?
c. Find the lines in the review report that express the auditor’s conclusion. Is it an audit opinion? Is it
a positive or negative statement?
d. Make a list of the other differences between the audit report and the review report.
Figure 1.3:
Figure 1.4:
Transcribed Image Text:
W&S PARTNERS Working for you. 1200-90 Eglinton Avenue East, Toronto, ON M4P 2Y3. Phone number: (416) 236-8743. INDEPENDENT AUDITOR'S REPORT To the Shareholders of Skyward Inc., Report on the Audit of the Consolidated Financial Statements Opinion We have audited the consolidated financial statements of Skyward Inc. and its subsidiaries (the Group), which comprise the consolidated statement of financial position as at December 31, 2020, and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consol- idated financial statements, including a summary of significant accounting policies. In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2020, and its consol- idated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSS). Basis for Opinion We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accor- dance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. (Description of each key audit matter in accordance with CAS 701.J Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRSs, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Group's financial reporting process. Auditor's Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial state- ments as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also • kdentify and assess the risks of malerial misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures respoNIsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a hasis for our opinion. The risk of not detecting a material misstalement resulting from frand is higher than for one resulting from error, as frand may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit proce- dures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disckosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the under- lying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with rele- vant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applica- ble, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit af the consolidated financial statements of the current pericxd and are therefore the key audit matters. We describe these matters in our anditor's report unkess law or regulation precludes public disclasure about the matter ar when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of dking so woukd reasonably be expected to cutwcigh the public interest benefits of such communication. The engagement partner on the audit resulting in this independent anditor's report is Nicholas Summers. Taronto, Canada "W&S Partners, LLP" Charlered Professional Accountants March X, 2020 Licensed Public Accountants W&S PARTNERS Working for you. 1200-90 Eglinton Avenue East, Toronto, ON M4P 2Y3. Phone number: (416) 236-8743. INDEPENDENT PRACTITIONER'S REVIEW ENGAGEMENT REPORT To the Board of Directors of Janeway Ltd. We have reviewed the accompanying financial statements of Janeway Ltd. that comprise the balance sheet as at December 31, 2020, and the statements of income, retained earnings, and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian accounting standards for private enterprises, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Practitioner's Responsibility Our responsibility is to express a conclusion on the accompanying financial statements based on our review. We conducted our review in accordance with Canadian generally accepted standards for review engagements, which require us to comply with relevant ethical requirements. A review of financial statements in accordance with Canadian generally accepted standards for review engagements is a limited assurance engagement. The practitioner performs procedures, primarily consisting of making inquiries of management and others within the entity, as appropriate, and applying analytical procedures, and evaluates the evidence obtained. The procedures performed in a review are substantially less in extent than, and vary in nature from, those performed in an audit conducted in accordance with Canadian generally accepted auditing standards. Accordingly, we do not express an audit opinion on these financial statements. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the financial statements do not present fairly, in all material respects, the financial position of Janeway Ltd. as at December 31, 2020, and the results of its operations and its cash flows for the year then ended in accordance with Canadian accounting standards for private enterprises. Toronto, Canada "W&S Partners, LLP" Chartered Professional Accountants March X, 2020 Licensed Public Accountants
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