ISA 800 (Revised)

Issued May 2016;

Updated July 2022

International Standard on Auditing™

Special Considerations – Audits of

Financial Statements Prepared in
Accordance with Special Purpose
Frameworks
 INTERNATIONAL STANDARD ON AUDITING 800 (REVISED)
SPECIAL CONSIDERATIONS—AUDITS OF FINANCIAL STATEMENTS
PREPARED IN ACCORDANCE WITH SPECIAL PURPOSE FRAMEWORKS

The Malaysian Institute of Accountants has approved this standard in July 2022 for
publication. This standard should be read in conjunction with the Preface to the
Malaysian Quality Control, Auditing, Review, Other Assurance and Related Ser-
vices Pronouncements; and the Malaysian Approved Preface to the International
Quality Cont rol, Auditing, Review, Other Assurance, and Related Services Pro-
nouncements; Glossary of Terms; and International Framework for Assurance
Engagements.

The status of International Standards on Auditing is set out in the Preface to the
Malaysian Quality Control, Auditing, Review, Other Assurance and Related Ser-
vices Pronouncements.

Applicability
International Standards on Auditing are to be applied in the audit of historical fi-
nancial information.

Changes of substance from May 2016

1. Conforming amendments have been made to this Standard as a result of:
• The Revised IESBA Code.
2. Changes made as appropriat e, for cross-referencing and other changes as
necessary.

Effective Date in Malaysia

This ISA is effective for audits of financial statements for periods ending on or after
15 December 2016.

Copy right © April 2021 by IFAC. All rights reserved. This publication may be
downloaded for personal and non-commercial use (i.e., professional reference or
research) or purchased from www.iaasb.org. Written permission is required to
translate, reproduce, store or transmit, or to make other similar us es of, this
document.
 INTERNATIONAL STANDARD ON AUDITING 800
(REVISED)
SPECIAL CONSIDERATIONS—AUDITS OF FINANCIAL
STATEMENTS PREPARED IN ACCORDANCE WITH SPECIAL
PURPOSE FRAMEWORKS
(Effective for audits of financial statements for periods
ending on or after 15 December 2016)

CONTENTS
Paragraph
Introduction
Scope of this ISA .............................................................................................. 1–3
Effective Date .................................................................................................... 4
Objective ............................................................................................................ 5
Definitions ......................................................................................................... 6–7
Requirements
Considerations When Accepting the Engagement ...................................... 8
Considerations When Planning and Performing the Audit ........................ 9–10
Forming an Opin ion and Reporting Considerations ................................... 11–14
Application and Other Explanatory Material
Definition of Special Purpose Framework .................................................... A1–A4
Considerations When Accepting the Engagement ...................................... A5–A8
Considerations When Planning and Performing the Audit ........................ A9–A12
Forming an Opin ion and Reporting Considerations ................................... A13–A21
Appendix: Illustrations of Independent Auditor’s Reports on Special
Purpose Financial Statements

International Standard on Aud itin g (ISA) 800 (Rev ised ), Special

Considerations—Audits of Financial Statements Prepared in Accordance with
Special Purpose Framewo rks, should be read in conjunction with ISA 200, Overall
Objectives of the Independent Auditor and the Conduct of an Audit in Accordance
with International Standards on Auditing .
Introduction
Scope of this ISA
1. The International Standards on Auditing (ISAs) in the 100 –700 series apply to an
audit of financial statements. This ISA deals with special considerations in the
application of those ISAs to an audit of financial statements prepared in accordance
with a special purpose framework.
2. This ISA is written in the context of a complete set of financial statements prepared
in accordance with a special purpose framework. ISA 805 (Revised) 1 deals with
special considerations relevant to an audit of a single financ ial statement or of a
specific element, account or item of a financial statement.
3. This ISA does not override the requirements of the other ISAs; nor does it purport to
deal with all special considerations that may be relevant in the circumstances of the
engagement.

Effective Date
4. This ISA is effective for audits of financial statements for periods ending on or after
December 15, 2016.

Objective
5. The objective of the auditor, when applying ISAs in an audit of financial statements
prepared in accordance with a special purpose framework, is to address
appropriately the special considerations that are relevant to:
(a) The acceptance of the engagement;
(b) The planning and performance of that engagement; and
(c) Forming an opinion and reporting on the financial statements.

Definitions
6. For purposes of the ISAs, the following terms have the meanings attributed below:
(a) Special purpose financial statements – Financial statements prepared in
accordance with a special purpose framework. (Ref: Para. A4)
(b) Special purpose framework – A financial reporting framework designed to
meet the financial information needs of specific users. The financial
reporting framework may be a fair presentation framework or a compliance
framework.2 (Ref: Para. A1–A4)

1
ISA 805 (Revised), Special Considerations—Audits of Single Financial Statements and Specific Elements,
Accounts or Items of a Financial Statement
2
ISA 200, Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with
International Standards on Auditing, paragraph 13(a)
7. Reference to “financial statements” in this ISA means “a complete set of special
purpose financial statements. The requirements of the applicable financial reporting
framework determine the presentation structure, and content of the financial
statements, and what constitutes a complete set of financial statements. Reference to
“special purpose financial statements” includes the related disclosures.

Requirements
Considerations When Accepting the Engagement
Acceptability of the Financial Reporting Framework
8. ISA 210 requires the auditor to determine the acceptability of the financial reporting
framework applied in the preparation of the financial statements. 3 In an audit of
special purpose financial statements, the auditor shall obtain an understanding of:
(Ref: Para. A5–A8)
(a) The purpose for which the financial statements are prepared;
(b) The intended users; and
(c) The steps taken by management to determine that the applicable financial
reporting framework is acceptable in the circumstances.

Considerations When Planning and Performing the Audit

9. ISA 200 requires the auditor to comply with all ISAs relevant to the audit. 4 In
planning and performing an audit of special purpose financial statements, the
auditor shall determine whether applica tion of the ISAs requires special
consideration in the circumstances of the engagement. (Ref: Para. A9 –A12)
10. ISA 315 (Revised) requires the auditor to obtain an understanding of the entity’s
selection and application of accounting policies. 5 In the case of financial statements
prepared in accordance with the provisions of a contract, the auditor shall obtain an
understanding of any significant interpretations of the contract that management
made in the preparation of those financial statements. An interpretation is
significant when adoption of another reasonable interpretation would have
produced a material difference in the information presented in the financial
statements.

Forming an Opinion and Reporting Considerations

11. When form ing an opin ion and report ing on special purpose financial statements,
the auditor shall apply the requ irements in ISA 700 (Rev ised). 6 (Ref: Para. A13–
A19)
3
ISA 210, Agreeing the Terms of Audit Engagements, paragraph 6(a)
4
ISA 200, paragraph 18
5
ISA 315 (Revised), Identifying and Assessing the Risks of Material Misstatement through Understanding
the Entity and Its Environment, paragraph 11(c)
6
ISA 700 (Revised), Forming an Opinion and Reporting on Financial Statements
Description of the Applicable Financial Reporting Framework
12. ISA 700 (Revised) requires the auditor to evaluate whether the financial statements
adequately refer to or describe the applicable financial reporting framework. 7 In the
case of financial statements prepared in accordance with the provisions of a
contract, the auditor shall evaluate whether the f inancial statements adequately
describe any significant interpretations of the contract on which the financial
statements are based.
13. ISA 700 (Revised) deals with the form and content of the auditor’s report, includin g
the specific ordering for certain elements. In the case of an auditor’s report on
special purpose financial statements:
(a) The auditor’s report shall also describe the purpose for which the financial
statements are prepared and, if necessary, the intended users, or refer to a
note in the special purpose financial statements that contains that
information; and
(b) If management has a choice of financial reporting frameworks in the
preparation of such financial statements, the explanation of management’s8
responsibility for the financial statements shall also make reference to its
responsibility for determining that the applicable financial reporting
framework is acceptable in the circumstances.
Alerting Readers that the Financial Statements Are Prepared in Accordance with a Special
Purpose Framework
14. The auditor’s report on special purpose financial statements shall include an
Emphasis of Matter paragraph alerting users of the auditor’s report that the financial
statements are prepared in accordance with a special purpose framework and that, as
a result, the f inancial statements may not be suitable for another purpose. (Ref: Para.
A20–A21)
***

Application and Other Explanatory Material

Definition of Special Purpose Framework (Ref: Para. 6)
A1. Examples of special purpose frameworks are:
● A tax basis of accounting for a set of financial statements that accompany an
entity’s tax return;
● The cash receipts and disbursements basis of accounting for cash flow
information that an entity may be requested to prepare for creditors;

7
ISA 700 (Revised), paragraph 15
8
Or other term that is appropriate in the context of the legal framework in the particular jurisdiction
 ● The financial reportin g provisions established by a regulator to meet the
requirements of that regulator; or
● The financial reportin g prov isions of a contract, such as a bond indenture, a
loan agreement, or a project grant.
A2. There may be circumsta nces where a special purpose framework is based on a
financial reporting framework established by an authorized or recognized standards
setting organization or by law or regulation, but does not comply with all the
requirements of that framework. An example is a contract that requires financial
statements to be prepared in accordance with most, but not all, of the Financial
Reporting Standards of Jurisdiction X. When this is acceptable in the circumstances
of the engagement, it is inappropriate for the description of the applicable financial
reporting framework in the special purpose financial statements to imply full
compliance with the financial reporting framework established by the authorized or
recognized standards setting organization or by law or regu lation. In the above
example of the contract, the description of the applicable financial reporting
framework may refer to the financial reporting provisions of the contract, rather
than make any reference to the Financial Reporting Standards of Jurisdiction X.
A3. In the circumstances described in paragraph A2, the special purpose framework
may not be a fair presentation framework even if the financial reporting framework
on which it is based is a fair presentation framework. This is because the special
purpose framework may not comply with all the requirements of the financial
reporting framework established by the authorized or recognized standards setting
organization or by law o r regu lation that are necessary to achieve fair presentation
of the financial statements.
A4. Financial statements prepared in accordance with a special purpose framework may
be the only financial statements an entity prepares. In such circumstances, those
financial statements may be used by users other than those for whom the financial
reporting framework is designed. Desp ite the broad distribution of the financial
statements in those circumstances, the financial statements are still considered to be
special purpose financial statements for purposes of the ISAs. The requirements in
paragraphs 13–14 are designed to avoid misunderstandings about the purpose for
which the financial statements are prepared. Disclosures comprise explanatory or
descriptive information, set out as required, expressly permitted or otherwise
allowed by the applicable financial reporting framework, on the face of financial
statements, or in the notes, or incorporated therein by cross-reference.9
Considerations When Accepting the Engagement
Acceptability of the Financial Reporting Framework (Ref: Para. 8)
A5. In the case of special purpose financial statements, the financial information needs
of the intended users are a key factor in determining the acceptability of the
financial reporting framework applied in the preparation of the financial statements.

9
ISA 200, paragraph 13(f)
A6. The applicable financial reporting framework may encompass the financial
reporting standards established by an organization that is authorized or recognized
to promulgate standards for special purpose financial statements. In that case, those
standards will be presumed acceptable for that purpose if the organization follows
an established and transparent process involving deliberation and consideration of
the views of relevant stakeholders. In some jurisdictions, law or regulation may
prescribe the financial reporting framework to be used by management in the
preparation of special purpose financial statements for a certain type of entity. For
example, a regulator may establish financial reporting provisions to meet the
requirements of that regulator. In the absence of indications to the contrary, such a
financial reporting framework is presumed acceptable for special purpose financial
statements prepared by such entity.
A7. Where the financial reportin g standards referred to in paragraph A6 are
supplemented by legislative or regulatory requirements, ISA 210 requires the
auditor to determine whether any conflicts between the financial reportin g standards
and the additional requirements exist, and prescribes actions to be taken by the
auditor if such conflicts exist.10
A8. The applicable financial reporting framework may encompass the financial
reporting provisions of a contract, or sources other than those described in
paragraphs A6 and A7. In that case, the acceptability of the financial reporting
framework in the circumstances of the engagement is determined by considerin g
whether the framework exhibits attributes normally exhibited by acceptable
financial reporting frameworks as described in Appendix 2 of ISA 210. In the case
of a special purpose framework, the relative importance to a particular engagement
of each of the attributes normally exhibited by acceptable financial reportin g
frameworks is a matter of professional judgment. For example, for purposes of
establishin g the value of net assets of an entity at the date of its sale, the vendor and
the purchaser may have agreed that very prudent estimates of allowances for
uncollectible accounts receivable are appropriate for their needs, even though such
financial information is not neutral when compared wit h financial information
prepared in accordance with a general purpose framework.

Considerations When Planning and Performing the Audit (Ref: Para. 9)

A9. ISA 200 requires the auditor to comply with (a) relevant ethical requirements,
including those pertaining to independence, relating to financial statement audit
engagements, and (b) all ISAs relevant to the audit. It also requires the auditor to
comply with each requirement of an ISA unless, in the circumstances of the audit,
the entire ISA is not relevant or the requirement is not relevant because it is
conditional and the condition does not exist. In exceptional circumstances, the
auditor may judge it necessary to depart from a relevant requirement in an ISA by
performing alternative audit procedures to a chieve the aim of that requirement.11
10
ISA 210, paragraph 18
11
ISA 200, paragraphs 14, 18, and 22–23
A10. Application of some of the requirements of the ISAs in an audit of special purpose
financial statements may require special consideration by the auditor. For example,
in ISA 320, judgments about matters that are m aterial to users of the financial
statements are based on a consideration of the common financial information needs
of users as a group.12 In the case of an audit of special purpose financial statements,
however, those judgments are based on a consideration of the financial information
needs of the intended users.
A11. In the case of special purpose financial statements, such as those prepared in
accordance with the requirements of a contract, management may agree with the
intended users on a threshold below which misstatements identified during the audit
will not be corrected or otherwise adjusted. The existence of such a threshold does
not relieve the auditor from the requirement to determine materiality in accordance
with ISA 320 for purposes of planning and performing the audit of the special
purpose financial statements.
A12. ISA 260 (Revised) requires the auditor to determine the appropriate person(s)
within the entity’s governance structure with whom to communicate.13 ISA 260
(Revised) notes that, in some cases, all of those charged governance are involved in
managing the entity, and the application of the communication requirements is
modified to recognize this position. 14 When a complete set of general purpose
financial statements is also prepared by the entity, those person(s) responsible for
the oversight of the preparation of the special purpose financial statements may not
be the same as those charged with governance responsible for the oversight of the
preparation of those general purpose financial statements.

Forming an Opinion and Reporting Considerations (Ref: Para. 11)

A13. The Appendix to this ISA contains illustrations of independent auditor’s reports on
special purpose financial statements. Other illustrations of auditor’s rep orts may be
relevant to reporting on special purpose financial statements (see for example, the
Appendices to ISA 700 (Revised), ISA 705 (Revised), 15 ISA 570 (Revised), 16 ISA
720 (Revised),17 and ISA 706 (Revised)).18

12
ISA 320, Materiality in Planning and Performing an Audit, paragraph 2
13
ISA 260 (Revised), Communication with Those Charged with Governance
14
ISA 260 (Revised), paragraph A8
15
ISA 705 (Revised), Modifications to the Opinion in the Independent Auditor’s Report
16
ISA 570 (Revised), Going Concern
17
ISA 720 (Revised), The Auditor’s Responsibilities Relating to Other Information
18
ISA 706 (Revised), Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent
Auditor’s Report
Application of ISA 700 (Revised) When Reporting on Special Purpose Financial
Statements
A14. Paragraph 11 of this ISA explains that the auditor is required to apply ISA 700
(Revised) when forming an opinion and reporting on special purpose financial
statements. In doing so, the auditor is also required to apply the reportin g
requirements in other ISAs and may find the special considerations addressed in
paragraphs A15–A19 below helpful.

Going Concern
A15. Special purpose financial statements may or may not be prepared in accordance
with a fina ncial reporting framework for wh ich the goin g concern basis of
accounting is relevant (e.g., the go ing concern basis of accounting is not relevant for
some financial statements prepared on a tax basis in particular jurisdictions). 19
Depending on the applicable financial reporting framework used in the preparation
of the special purpose financial statements, the description in the auditor’s report of
management’s responsibilities 20 relating to going concern may need to be adapted
as necessary. The description in the auditor’s report of the auditor’s
responsibilit ies 21 may also need to be adapted as necessary depending on how ISA
570 (Revised) applies in the circumstances of the engagement.

Key Audit Matters

A16. ISA 700 (Revised) requires the auditor to comm unicate key audit matters in
accordance with ISA 701 22 for audits of complete sets of general purpose financial
statements of listed entities. For audits of special purpose financial statements, ISA
701 only applies when communication of key audit matters in the auditor’s report on
the special purpose financial statements is required by law o r regu lation or the
auditor otherwise decides to communicate key audit matters. When key audit
matters are communicated in the auditor’s report on special purpose finan cial
statements, ISA 701 applies in its entirety. 23

Other Information
A17. ISA 720 (Revised) deals with the auditor’s responsibilities relating to other
information. In the context of this ISA, reports containing or accompanying the
special purpose financial statements—the purpose of which is to provide owners (or
similar stakeholders) with information on matters presented in the special purpose
financial statements—are considered to be annual reports for the purpose of ISA
720 (Revised). In the case of financial statements prepared using a special purpose

19
ISA 570 (Revised), paragraph 2
20
See ISA 700 (Revised), paragraphs 34(b) and A48.
21
See ISA 700 (Revised), paragraph 39(b)(iv).
22
ISA 701, Communicating Key Audit Matters in the Independent Auditor’s Report
23
ISA 700 (Revised), paragraph 31
 framework, the term “similar stakeholders” includes the specific users whose
financial information needs are met by the design of the special purpose framework
used to prepare the special purpose financia l statements. When the auditor
determines that the entity plans to issue such a report, the requirements in ISA 720
(Revised) apply to the audit of the special purpose financial statements.

Name of the Engagement Partner

A18. The requirement in ISA 700 (Revised) for the auditor to include the name of the
engagement partner in the auditor’s report also applies to audits of special purpose
financial statements of listed entities. 24 The auditor may be required by law or
regulation to include the name of the engagement partner in the auditor’s report or
may otherwise decide to do so when report ing on special purpose financial
statements of entities other than listed entities.
Inclusion of a Reference to the Auditor’s Report on the Complete Set of General
Purpose Financial Statements
A19. The auditor may deem it appropriate to refer, in an Other Matter paragraph in the
auditor’s report on the special purpose financial statements, to the auditor’s report
on the complete set of general purpose financial statements or to matter(s) reported
therein (see ISA 706 (Revised)). 25 For example, the auditor may consider it
appropriate to refer in the auditor’s report on the special purpose financial
statements to a Material Uncertainty Related to Going Concern sect ion included in
the auditor’s report on the complete set of general purpose financial statements.
Alerting Readers that the Financial Statements Are Prepared in Accordance with a
Special Purpose Framework (Ref: Para. 14)
A20. The special purpose financial statements may be used for purposes other than those
for which they were intended. For example, a regulator may require certain entities
to place the special purpose financial statements on public record. To avoid
misunderstandings, the auditor a lerts users of the auditor’s report by including an
Emphasis of Matter paragraph explaining that the financial statements are prepared
in accordance with a special purpose framework and, therefore, may not be suitable
for another purpose. ISA 706 (Revised) requires this paragraph to be included
within a separate section of the auditor’s report with an appropriate heading that
includes the term “Emphasis of Matter”.26
Restriction on Distribution or Use (Ref: Para. 14)
A21. In addition to the alert required by paragraph 14, the auditor may consider it
appropriate to indicate that the auditor’s report is intended solely for the specific
users. Depending on the law or regu lation of the particular jurisdiction, this may be

24
See ISA 700 (Revised), paragraphs 45 and A56–A58
25
See ISA 706 (Revised), paragraphs 10–11.
26
See paragraph 9(a) of ISA 706 (Revised)
achieved by restricting the distribution or use of the auditor’s report. In these
circumstances, the paragraph referred to in paragraph 14 may be expanded to
include these other matters, and the heading modified accordingly (see illustrations
in the Appendix to this ISA).
 Appendix
(Ref: Para. A14)

Illustrations of Independent Auditor’s Reports on Special Purpose

Financial Statements
● Illustration 1: An auditor’s report on a complete set of financial statements of an
entity other than a listed entity prepared in accordance with the f inancial re portin g
provisions of a contract (for purposes of this illustration, a compliance framework).
● Illustration 2: An auditor’s report on a complete set of financial statements of an
entity other than a listed entity prepared in accordance with the tax basis of
accounting in Ju risd iction X (for purposes of this illustration, a compliance
framework).
● Illustration 3: An auditor’s report on a complete set of financial statements of a
listed entity prepared in accordance with the financial reporting provisions
established by a regulator (for purposes of this illustration, a fair presentation
framework).
Illustration 1: An auditor’s report on a complete set of financial statements of
an entity other than a listed entity prepared in accordance with the financial
reporting provisions of a contract (for purposes of this illustration, a
compliance framework).
For purposes of this illustrative auditor’s report, the following circumstances
are assumed:
• The financial statements have been prepared by management of the
entity in accordance with the financial reporting provisions of a contract
(that is, a special purpose framework). Ma nagement does not have a
choice of financial reporting frameworks.
• The applicable financial reporting framework is a compliance
framework.
• An auditor’s report o n the complete set of general purpose financial
statements was not issued.
• The terms of the audit engagement reflect the description of
management’s responsibility for the financial statements in ISA 210.
• The auditor has concluded an unmodified (i.e., “clean”) opinion is
appropriate based on the audit evidence obtained.
• The relevant ethical requirements that apply to the audit are those of the
jurisdiction.
• Based on the a udit evidence obtained, the auditor has concluded that a
material uncertainty does no t exist related to events or conditions that
may cast significant doubt on the enti ty’s ability to conti nue as a going
concern in accordance with ISA 570 (Revised).
• Distribution and use of the auditor’s report are restricted.
• The auditor is not required, and has otherwise not decided, to
communicate key audit matters in accordance with ISA 701.
• The auditor has determined that there is no other information (i.e., the
requirements of ISA 720 (Revised) do not apply).
• Those responsible for oversight of the financial reporting process differ
from those responsible for the preparation of the financial statements.
• The auditor has no other reporti ng responsibilities required under local
law or regulation.
INDEPENDENT AUDITOR’S REPORT
[Appropriate Addressee]

Opinion
We have audited the financial statements of ABC Company (the Company), wh ich
comprise the balance sheet as at December 31, 20X1, and the income statement, statement
of changes in equity and cash flow statement for the year then ended , and notes to the
financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying financial statements of the Company for the year ended
December 31, 20X1 are prepared in all material respects, in accordance with the financial
reporting provisions of Sect ion Z of the contract dated January 1, 20X1 between the
Company and DEF Company (“the contract”).

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs).
Our responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Statements section of our report. We are
independent of the Company in accordance with the ethical requirements that are relevant
to our audit of the financial statements in [jurisdiction], and we have fulfilled our other
ethical responsibilit ies in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter – Basis of Accounting and Restriction on Distribution and Use

We draw attention to Note X to the financial statements, which describes the basis of
accounting. The financial statements are prepared to assist the Company in complying with
the financial reporting provisions of the contract referred to above. As a resu lt, the financial
statements may not be suitable for another purpose. Our report is intended solely for the
Company and DEF Company and should not be distributed to or used by parties other than
the Company or DEF Company. Our opinion is not modified in respect of this matter.

Responsibilities of Management and Those Charged with Governance for the

Financial Statements27
Management is responsible for the preparation of the financial statements in accordance
with the financial reporting provisions of Section Z of the contract 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.
In preparing the financial statements, management is responsible for assessin g the
Company’s ability to continue as a going concern, d isclosing, as applicable, matters

27
Throughout these illustrative auditor’s reports, the terms management and those charged with governance
may need to be replaced by another term that is appropriate in the context of th e legal framework in the
particular jurisdiction.
relating to going concern and using the go ing concern basis of accounting unless
management either intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial
reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assura nce about whether the financial statements 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 ISAs will
always detect a material misstatement when it ex ists. 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
financial statements.

Paragraph 41(b) of ISA 700 (Revised) explains that the shaded material below can be located in an Appendix
to the auditor’s report. Paragraph 41(c) of ISA 700 (Revis ed) explains that when law, regulation or national
auditing standards expressly permit, reference can be made to a website of an appropriate authority that
contains the description of the auditor’s responsibilities, rather than including this material in the auditor’s
report, provided that the description on the website addresses, and is not inconsistent with, the description of
the auditor’s responsibilities below.

As part of an audit in accordance with ISAs, we exercise professional judgment and

maintain professional skepticism throughout the audit. We also:
● Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient and appropriate to provide
a basis for our opinion. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud 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 procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Company’s internal control.28
● 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
28
This sentence would be modified, as appropriate, in circumstances when the auditor also has responsibility
to issue an opinion on the effectiveness of internal control in conjunction with the audit of the financial
statements.
 uncertainty exists related to events or conditions that may cast significant doubt
on the Company’s ability to continue as a going concern. If we con clude that a
material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial statements or, if such disclosures
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 Company to cease to continue as a going concern.
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.

Signature in the name of the audit firm, the personal name of the auditor, or both, as
appropriate for the particular jurisdiction]
[Auditor address] [Placement of date and address reversed)]
[Date]
Illustration 2: An auditor’s report on a complete set of financial statements of
an entity other than a listed entity prepared i n accordance with the tax basis of
accounting in Jurisdiction X (for purposes of this illustration, a compliance
framework).
For purposes of this illustrative auditor’s report, the following circumstances
are assumed:
• Audi t of a complete set of financial statements that have been prepared by
management of a partnership in accordance with the tax basis of
accounting in Jurisdiction X (that is, a special purpose framework) to
assist the partners in preparing their individual income tax returns.
Management does not have a choice of financial reporting frameworks.
• The applicable financial reporting framework is a compliance framework.
• The terms of the audit engagement reflect the description of
management’s responsibility for the financial statements in ISA 210.
• The auditor has concluded a n unmodified (i.e., “clean”) opinion is
appropriate based on the audit evidence obtained.
• The relevant ethical requirements that apply to the audit are those of the
jurisdiction.
• Based on the audit evidence obtained, the auditor has concluded that a
material uncertainty does not exist related to events or conditions that
may cast significant doubt on the enti ty’s ability to continue as a going
concern in accordance with ISA 570 (Revised).
• Distribution of the auditor’s report is restricted.
• The auditor is not required, and has otherwise not decided, to
communicate key audit matters in accordance with ISA 701.
• The auditor has determined that there is no other information (i.e., the
requirements of ISA 720 (Revised) do not apply).
• Those responsi ble for oversight of the financial statements differ from
those responsible for the preparation of the financial statements.
• The auditor has no other reporting responsibilities required under local
law or regulation.
INDEPENDENT AUDITOR’S REPORT
[Appropriate Addressee]

Opinion
We have audited the financial statements of ABC Partnership (the Partnership), wh ich
comprise the balance sheet as at December 31, 20X1 and the income statement for the year
then ended, and notes to the financial statements, including a summary of sign ificant
accounting policies.
In our opinion, the accompanying financial statements of the Partnership for the year ended
December 31, 20X1 are prepared, in all material respects, in accordance with [describe the
applicable income tax law] of Jurisdiction X.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs).
Our responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Statements section of our report. We are
independent of the Partnership in accordance with the ethical requirements that are
relevant to our audit of the financial statements in [jurisdiction], and we have fulfilled our
other ethical responsibilities in accordance with these requirements. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.

Emphasis of Matter – Basis of Accounting and Restriction on Distribution

We d raw attention to Note X to the financial statements, wh ich describes the basis of
accounting. The f inancial statements are prepared to assist the partners of the
Partnersh ip in p reparing their ind iv idual income tax returns. As a resu lt, the financial
statements may not be suitable for another purpose. Ou r report is intended so lely for the
Partnersh ip and it s partners and shou ld not be d ist ributed to parties other than the
Partnership or its partners. Our opinion is not modified in respect of this matter.

Responsibilities of Management and Those Charged with Governance for the

Financial Statements29
Management is responsible for the preparation of the financial statements in accordance
with the tax basis of accounting in Jurisd iction X 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.

29
Or other terms that are appropriate in the context of the legal framework in the particular jurisdiction
In preparing the financial statements, management is responsible for assessing the Com-
pany’s ability to continue as a going concern, d isclosing, as applicable, matters relating to
going concern and using the go ing concern basis of accounting unless management either
intends to liquidate the Company or to cease operations, or has no realistic alternative but
to do so.

Those charged with governance are responsible for overseeing the Partnership’s financial
reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements 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 International
Standards on Auditing (ISAs) 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 financial statements.

Paragraph 41(b) of ISA 700 (Revised) explains that the shaded material below can be located in an Appendix
to the auditor’s report. Paragraph 41(c) of ISA 700 (Revised) explains that when law, regulation or national
auditing standards expressly permit, reference can be made to a website of an appropriate authority that
contains the description of the auditor’s responsibilities, rather than including this material in the auditor’s
report, provided that the description on the website addresses, and is not inconsistent with, the description of
the auditor’s responsibilities below.

As part of an audit in accordance with ISAs, we exercise professional judgment and

maintain professional skepticism throughout the audit. We also:
● Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient and appropriate to provide
a basis for our opinion. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud 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 procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Partnership’s internal
control.30

30
This sentence would be modified, as appropriate, in circumstances when the auditor also has responsibility
to issue an opinion on the effectiveness of internal control in conjunction with the audit of the financial
statements.
 ● 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 Company’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 financial statements or, if such disclosures
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 Company to cease to continue as a going concern.
● Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by management.
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.
[Signature in the name of the audit firm, the personal name of the auditor, or both, as
appropriate for the particular jurisdiction]
[Auditor address] [Placement of date and address reversed)]
[Date]
Illustration 3: An auditor’s report on a complete set of financial statements of a
listed entity prepared in accordance with the financial reportin g provisions
established by a regulator (for purposes of this illustration, a fair presentation
framework).
For purposes of this illustrative auditor’s report, the following circumstances are
assumed:
• Audit of a complete set of financial statements of a listed entity that have been
prepared by management of the entity in accordance with the financial
reporting p rovisions established by a regulator (that is, a special purpose
framework) to meet the requirements of that regulator. Management does not
have a choice of financial reporting frameworks.
• The applicable financial reporting framework is a fair presentation framework.
• The terms of the audit engagement reflect the description of management’s
responsibility for the financial statements in ISA 210.
• The auditor has concluded an unmodified (i.e., “clean”) opinion is appropriate
based on the audit evidence obtained.
• The relevant ethical requirements that apply to the audit are those of the
jurisdiction.
• Based on the audit evidence obtained, the auditor has concluded that a material
uncertainty exists related to events or conditions that may cast sign ificant doubt
on the entity’s ability to continue as a going concern in accordance with ISA
570 (Revised). The disclosure of the material uncertainty in the financial
statements is adequate.
• Distribution or use of the auditor’s report is not restricted.
• The auditor is required by the regulator to communicate key audit matt ers in
accordance with ISA 701.
• The Other Matter paragraph refers to the fact that the auditor has also issued an
auditor’s report on financial statements prepared by ABC Company for the
same period in accordance with a general purpose framework.
• The auditor has determined that there is no other information (i.e., the
requirements of ISA 720 (Revised) do not apply).
• Those responsible for oversight of the financial statements differ from those
responsible for the preparation of the financial statements.
• The auditor has no other reporting responsibilit ies required under local law or
regulation.
INDEPENDENT AUDITOR’S REPORT
[To the Shareholders of ABC Company or Appropriate Addressee]

Opinion
We have audited the financial statements of ABC Company (the Company), wh ich
comprise the balance sheet as at December 31, 20X1, and the income statement, statement
of changes in equity and cash flow statement for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying financial statements present fairly, in all material
respects, (or give a true and fair view of) the financial position of the Company as at
December 31, 20X1, and (of) its financial performance and its cash flows for the year then
ended in accordance with the financial reporting provisions of Section Y of Regulation Z.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs).
Our responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Statements section of our report. We are
independent of the Company in accordance with the ethical requirements that are relevant
to our audit of the financial statements in [jurisdiction], and we have fulfilled our other
ethical responsibilit ies in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter – Basis of Accounting

We draw attention to Note X to the financial statements, which describes the basis of
accounting. The financial statements are prepared to assist the Company to meet the
requirements of Regulator DEF. As a result, the financial statements may not be suitable
for another purpose. Our opinion is not modified in respect of this matter.

Material Uncertainty Related to Going Concern

We draw attention to Note 6 in the financial statements, which indicates that the Company
incurred a net loss of ZZZ during the year ended December 31, 20X1 and, as of that date,
the Company’s current liabilities exceeded its total assets by YYY. As stated in Note 6,
these events or conditions, along with other matters as set forth in Note 6, in dicate that a
material uncertainty exists that may cast significant doubt on the Company’s ability to
continue as a going concern. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current period. These matters
were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters. In
addition to the matter described in the Material Uncertainty Related to Going Concern
section above, we have determined the matters described below to be key audit matters to
be communicated in our report.

[Description of each key audit matter in accordance with ISA 701 as applied to this audit.]

Other Matter
The Company has prepared a separate set of financial statements for the year ended
December 31, 20X1 in accordance with International Financial Report ing Standards on
which we issued a separate auditor’s report to the shareholders of the Company dated
March 31, 20X2.

Responsibilities of Management and Those Charged with Governance for the

Financial Statements31
Management is responsible for the preparation and fair presentation of the financial
statements in accordance with the financial reporting provisions of Section Y of
Regulation Z32 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.
In preparing the financial statements, management is responsible for assessing the
Company’s ability to continue as a going concern, d isclosing, as applicable, matters
relating to going concern and using the go ing concern basis of accounting unless
management either intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Co mpany’s financial
reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements 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 International
Standards on Auditing (ISAs) 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 financial statements.

31
Or other terms that are appropriate in the context of the legal framework in the particular jurisdiction
32
Where management’s responsibility is to prepare financial statements that give a true and fair view, this may
read: “Management is responsible for the preparation of a financial statements that give a true and fair view
in accordance with the financial reporting provisions of section Y of Regulation Z and for such …”
 Paragraph 41(b) of ISA 700 (Revised) explains that the shaded material below can be located in an Appendix
to the auditor’s report. Paragraph 41(c) of ISA 700 (Revised) explains that when law, regulation or national
auditing standards expressly permit, reference can be made to a website of an appropriate authority that
contains the description of the auditor’s responsibilities, rather than including this material in the auditor’s
report, provided that the description on the website addresses, and is not inconsistent with, the description of
the auditor’s responsibilities below.

As part of an audit in accordance with ISAs, we exercise professional judgment and

maintain professional skepticism throughout the audit. We also:

● Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient and appropriate to provide
a basis for our opinion. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.

● Obtain an understanding of internal control relevant to audit in order to design

audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Company internal control. 33

● Evalua te 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 Company’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to dra w attention in our auditor’s
report to the related disclosures in the financial statements or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. Howev er, future events or
conditions may cause the Company to cease to continue as a going concern.

● Evaluate the overall presentation, structure and content of the financial

statements, includ ing the disclosures, and whether the financial statements
represent the underlying transactions and events in a manner that achieves fair
presentation.

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.

33
This sentence would be modified, as appropriate, in circumstances when the auditor also has responsibility
to issue an opinion on the effectiveness of internal control in conjunction with the audit of the financial
statements.
 We also provide those charged with governance with a statement that we have
complied with relevant 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 applicable, actions taken to eliminate
threats or safeguards applied.
From the matters communicated with those charged with governance, we determine
those matters that were of most signif icance in the audit of the financial statements of
the current period and are therefore the key audit matters. We describe these matters in
our auditor’s report unless law or regu lation precludes public disclosure about t he
matter or when, in extremely rare circumstances, we determine that a matter should not
be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such
communication.
The engagement partner on the audit resulting in this independent auditor’s report is
[name].
[Signature in the name of the audit firm, the personal name of the auditor, or both, as
appropriate for the particular jurisdiction]
[Auditor address] [Placement of date and address reversed)]
[Date]
Dewan Akauntan, Unit 33-01, Level 33, Tower A, The Vertical, Avenue 3
Bangsar South City, No.8, Jalan Kerinchi, 59200 Kuala Lumpur, Malaysia
[phone] +603 2722 9000 [fax] +603 2722 9100
[web] www.mia.org.my [email] [email protected]