Auditors Report

PSA 700 (Redrafted)
Illustration 1:
Circumstances include the following:
    • Audit of a complete set of financial statements.
    • The financial statements are prepared for a general purpose by management of the entity in accordance with PFRS.
    • The terms of the audit engagement reflect description management’s responsibility for the financial statements in PSA 210 (Redrafted).
    • In addition to the audit of the financial statements, the auditor has other reporting responsibilities required under local law.


[Appropriate Addressee]

Report on the Financial Statements

We have audited the accompanying financial statements of ABC Company, which 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 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 Philippine Financial Reporting Standards; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.   We conducted our audit in accordance with Philippine Standards on Auditing.   Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.   The procedures selected depend on the auditor’s judgment, including...