Modifications to the Opinion in the Independent Auditor's Report - Completed

  • Modifications to the Opinion in the Independent Auditor's Report - Completed

    Project Status

    Modifications to the Opinion in the Independent Auditor's Report - Completed

    Staff

    Kathleen Healy

    Task Force

    Sylvia Smith, Chair
    Marcel Pheijffer, Member

    Objective(s) of project

    The objective of this project was to redraft the close off document of ISA 705 (Revised), Modifications to the Opinion in the Independent Auditor's Report, in accordance with the clarity drafting conventions agreed by the IAASB to be applied to all ISAs.

    The IAASB approved ISA 705 (Revised and Redrafted), Modifications to the Opinion in the Independent Auditor's Report in June 2008. The ISA is effective for audits of financial statements for periods beginning on or after December 15, 2009. A Basis for Conclusions will provide background to the project, main comments received on the exposure draft, and the IAASB's conclusions regarding these comments in developing the final standard.

    Background

    In March 2005, the IAASB issued an exposure draft of proposed ISA 705, Modifications to the Opinion in the Independent Auditor's Reports.

    The IAASB gave due consideration to the comments received on the proposed ISA. The basis for the IAASB's conclusions is explained in the Basis for Conclusions: Close Off Document - ISA 705 (Revised).

    The IAASB approved the close off document of ISA 705 (Revised) (i.e., following the IAASB's current drafting conventions) in July 2006. That document incorporates the changes based on the comments received on the March 2005 exposure draft.

    Task Force progress / Board discussions to date

    In July 2007, the IAASB approved an exposure draft of proposed ISA 705 (Revised and Redrafted), Modifications to the Opinion in the Independent Auditor's Report. The proposed ISA has been redrafted in accordance with the clarity drafting conventions agreed by the IAASB to be applied to all ISAs.

    At the June 2008 meeting , the IAASB discussed a Summary of Significant Comments and Task Force Recommendations and proposed final ISA 705 (Revised and Redrafted).

    Significant comments relating to ED-ISA 705 (Revised and Redrafted) included a revised objective and revisions to the definition of the term "pervasive," changes to the requirements relating to the auditor's actions in the case of a management-imposed scope limitation, and clarification of the prohibition on issuing a piecemeal opinion.

    The IAASB approved ISA 705 (Revised and Redrafted), Modifications to the Opinion in the Independent Auditor's Report as a final standard in June 2008. The ISA will be published after the Public Interest Oversight Board has confirmed that due process was followed in its development.

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