The ISA attempt to ensure that the report of the auditors is clearly understood by giving guidelines to auditors as to how the report should be constructed and what details it
should contain. This supplements the requirements of the companies Act and ensures that the audit report is well understood by the users of the audited financial statements.
For example it requires auditors to: –
i) Identify the financial statements to which the report covers.
ii) Describe the scope of an audit as having been conducted in accordance with ISA‘s or relevant national standards.
iii) A statement describing the audit as including:-
examining on a test basis evidence to support the financial statement amounts and disclosures
assessing the accounting principles used in the preparation of the financial statements
assessing the significant estimates made by management in the preparation of the financial statements
evaluating the overall financial statement and also that the audit provides a reasonable basis for the opinion.
iv) A paragraph educating the users of the report on the responsibilities of the auditor and the directors responsibility regarding the financial statements.