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Auditing Guidance Statement AGS 1050 (July 2002)

Audit Issues Relating to the Electronic Presentation of Financial Reports Prepared by the Auditing & Assurance Standards Board of the Australian Accounting Research Foundation

Issued by the Australian Accounting Research Foundation on behalf of CPA Australia and The Institute of Chartered Accountants in Australia

Australian Accounting Research Foundation was established by CPA Australia and The Institute of Chartered Accountants in Australia, and undertakes a range of technical and research activities on behalf of the accounting profession as a whole. A major responsibility of the Foundation is the development of Australian Auditing Standards and Statements. Auditing Guidance Statements are issued by the Auditing & Assurance Standards Board where the Board wishes to provide guidance on procedural matters, guidance on entity or industry specific issues, or believes an underlying principle in an Auditing Standard requires clarification, explanation or elaboration. Auditing Guidance Statements do not establish new Auditing Standards, do not amend existing Auditing Standards, and are not mandatory. Australian Accounting Research Foundation Level 10, 600 Bourke Street Melbourne Victoria 3000 AUSTRALIA

Phone: (03) 9641 7433 Fax: (03) 9602 2249 E-mail: [email protected] Website: www.aarf.asn.au

COPYRIGHT 2002 Australian Accounting Research Foundation (AARF). The text, graphics and layout of this Statement are protected by Australian copyright law and the comparable law of other countries. No part of this Statement may be reproduced stored or transmitted in any form or by any means without the prior written permission of the AARF except as permitted by law. ISSN 1324-4191

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AUDITING GUIDANCE STATEMENT

AGS 1050 “AUDIT ISSUES RELATING TO THE ELECTRONIC PRESENTATION OF FINANCIAL

REPORTS”

CONTENTS

Paragraphs

Introduction................................................................................ .01-.06 Definitions.................................................................................. .07-.14

Objectives and General Principles Governing an Audit of a Financial Report...................................................................... .15-.16

Consideration of Financial Report Audit Engagement Terms ...................................................................................... .17-.19

Separate Web Site Assurance .................................................... .20-.22

Factors in Electronic Reporting Impacting on the Audit Report............................................................................ .23-.26

Audit Procedures........................................................................ .27-.33

Other Information in Documents Containing Audited Financial Reports .................................................................... .34-.37

Management Representations .................................................... .38

The Electronic Audit Report ...................................................... .39-.44

Operative Date ........................................................................... .45

Compatibility with International Standards and Statements on Auditing........................................................... .46

Appendix 1: The Electronic Presentation of Information on the Entity’s Web Site

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Appendix 2: Example of a Paragraph for Inclusion in an Engagement Letter Providing Reference to the Electronic Presentation of an Audited Financial Report and Audit Report

Appendix 3: Factors Impacting on the Electronic Presentation of the Audit Report

Appendix 4: Example of an Audit Report Provided for Presentation on an Entity’s Web Site

Appendix 5: Example of Information Provided to Users when Extracts from the Audited Financial Report are Included on an Entity’s Web Site

AGS 1050 “AUDIT ISSUES RELATING TO THE ELECTRONIC PRESENTATION OF FINANCIAL REPORTS”

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Introduction

.01 The purpose of this Auditing Guidance Statement is to provide guidance to an auditor where an entity uses information technology (IT) for the presentation of audited financial information on a public network such as the Internet.

.02 With the development of the World Wide Web (www), many entities have constructed web sites which serve as a means of communication with customers, suppliers, investors, shareholders and the public at large. An entity’s web site may contain a wide range of information about the entity’s business, including financial information. An entity’s annual report is often included on the entity’s web site.

.03 An entity may decide to present its audited financial report on its web site to provide interested parties with access to that information at minimum cost. For example, a reporting entity producing concise financial reports for distribution to shareholders may use the entity’s web site as a cost-effective means of providing public access to the full audited financial report.

.04 The responsibilities of management and the auditor do not change when the financial report is electronically presented. The preparation and presentation of the financial report remain management’s responsibility whether that financial information is presented in hard copy or electronically on a web site. However, the practices surrounding the electronic presentation of information on a web site may require the auditor to consider the approach taken to presenting the audit report electronically (refer to Appendix 1: The Electronic Presentation of Information on the Entity’s Web Site).

.05 This AGS identifies specific matters which may be addressed by the auditor with management to reduce the risk that the audit report on an entity’s financial report is inappropriately associated with unaudited information on the entity’s web site.

.06 Engagements to provide assurance in respect of matters relating to the entity’s web site do not form part of the financial report auditing engagement, but may be agreed with management as a separate engagement.

Definitions

.07 Definitions of IT terms can vary significantly. For the purpose of this AGS the following definitions have been adopted.


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.08 “HTML” (hypertext markup language) – a set of tags and rules used in developing hypertext documents. HTML is an example of one of the languages which may be used in hypertext documents, to describe the relationship between a document’s content and its structure.

.09 “Hyperlink” – a reference (link) from some point in one hypertext document to (some point in) another document or another place in the same document. A browser usually displays a hyperlink in some distinguishing way, for example by using a different colour, font or style. When the user activates the link (eg. by clicking on it with the mouse) the browser will display the target of the link.

.10 “Icon” – a graphic symbol (usually a simple picture) that denotes a program or a command or a data file.

.11 “Internet” – the world wide network of computer networks.

.12 “PDF” (Portable Document Format) – the file format for Adobe Systems’ Acrobat. PDF is the file format for representing documents in a manner that is independent of the original application software, hardware, and operating system used to create those documents. A PDF file can describe documents containing any combination of text, graphics, and images in a device-independent and resolution independent format. These documents can be one page or thousands of pages, very simple or extremely complex with an extensive use of fonts, graphics, colour and images.

.13 “URL” (Uniform Resource Locator) – specifies the location of an object on the Internet, such as a file or a newsgroup. URLs are used extensively on the World Wide Web. They are used in HTML documents to specify the target of a hyperlink which is often another HTML document (possibly stored on another computer).

.14 “Web site” – any computer on the Internet running a World Wide Web server process. A particular web site is identified by the hostname part of a URL.

Objectives and General Principles Governing an Audit of a Financial Report

.15 The objectives and general principles governing an audit of a financial report identified in AUS 202 “Objectives and General Principles Governing an Audit of a Financial Report” do not change when the financial report and audit report are presented in an electronic reporting medium. The principle that management of the entity has responsibility for the preparation and presentation of the


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financial report applies whether the financial report is produced in hard copy or electronic format.

.16 When management presents the audited financial report and audit report in an electronic reporting medium, new issues arise in the publication process. This AGS considers how these issues affect the auditor’s professional responsibilities under Australian Auditing Standards.

Consideration of Financial Report Audit Engagement Terms

.17 The terms of the audit engagement ordinarily include reference to management’s responsibility for the financial report and the form of any reports or other communication of results of the engagement.

.18 The practices surrounding electronic reporting may require the auditor to consider the approach taken to the presentation of the audit report electronically (refer Appendix 1). Certain characteristics in the presentation of electronic documents may increase the risk of inappropriate association of unaudited information with the audit report. Therefore the auditor clarifies matters affecting the electronic presentation of the financial report and the audit report in the terms of the audit engagement.

.19 The auditor clarifies the entity’s responsibility for control issues relevant to electronic information. This may be achieved by clear statements in the engagement letter that:

(a) the electronic presentation of the audited financial report and audit report is management’s responsibility; and

(b) the examination of the controls over the electronic presentation of audited financial information on the entity’s web site is beyond the scope of the audit of the financial report.

Appendix 2 provides an example of a paragraph for inclusion in an engagement letter or other suitable form of engagement contract, regarding the electronic presentation of audited financial information.

Separate Web Site Assurance Engagements

.20 The auditor may agree to provide additional assurance in respect of information or issues relating to the entity’s web site. For example,


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management may request that the auditor provide assurance in respect of:

(a) selected financial data to be included on the entity’s web site;

(b) the effectiveness of controls and security over audited financial information on the entity’s web site;

(c) other information presented on the web site.

These services do not form part of the audit of the financial report and therefore the terms are agreed with management as a separate engagement.

.21 When the auditor is requested to provide additional web site assurance, the auditor considers the technical training and proficiency of the personnel to be assigned to the engagement. The auditor refers to AUS 206 “Quality Control for Audit Work” (for experts employed by the auditor), or AUS 606 “Using the Work of an Expert” (when an expert is engaged or employed by an auditee or engaged by the auditor).

.22 Similarly, where the entity uses a service provider to access the Internet and/or maintain the entity’s web site, the auditor refers to AUS 404 “Audit Implications Relating to Entities Using a Service Entity” for guidance.

Factors in Electronic Reporting Impacting on the Audit Report

.23 The audit report provides assurance that the financial report has been prepared, in all material respects, in accordance with the relevant financial reporting framework. The association of the audit report with the applicable financial report is clearly recognised in the traditional reporting medium of a hard copy financial report. The presentation of information on a web site using an electronic medium raises a number of different presentation issues which impact on the way the audit report is associated with the financial report. These issues are discussed further in Appendix 1.

.24 In the traditional reporting medium of hard copy reporting, information remains “static”, in that once published it can only be updated by replacing the printed copy with freshly published material. In contrast, electronic reporting occurs in a “dynamic” environment which allows all or part of a report, once published, to be updated or replaced without it becoming apparent that a revision


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has occurred. Therefore, the electronic format of the financial report and audit report may be a matter of concern for the auditor.

.25 Fundamental differences between the use of paper, and the use of the Internet to communicate information, raise concerns regarding the suitability of the traditional characteristics of an audit report when transferred to an electronic medium. For example, the use of page numbers may not be an appropriate means of identifying the audited information when presented in electronic format. Similarly the date when the audit report is signed and the auditor’s signature itself may not hold the same significance in an electronic medium as it does in the hard copy format. The nature of concerns relating to these characteristics is discussed further in Appendix 3.

.26 AUS 212 “Other Information in Documents Containing Audited Financial Reports” recognises that while the objective and scope of an audit of a financial report are formulated on the premise that the auditor’s responsibility is restricted to information identified in the audit report, the credibility of the audited financial report may be undermined by inconsistencies which may exist between the audited financial report and other information published with it. In an electronic reporting medium, the way in which other information is associated with the audited financial report may also impact on the credibility of the audited financial report.

Audit Procedures

.27 When the financial report is produced in hard copy format, the auditor ordinarily examines the final drafts that will be provided to the printer for publication, to ensure that the financial report which has been audited, is the same as the financial report presented for printing. Similarly when the financial report is produced in electronic format, the auditor examines the final electronic file version, prior to its inclusion on the entity’s web site.

.28 The electronic presentation of the financial report is management’s responsibility. Therefore, during the course of the audit, the auditor communicates with management or the audit committee regarding matters relating to the electronic presentation of the audited financial report and audit report on the entity’s web site (refer to Appendix 1). The auditor first establishes the context for discussion by advising management that the electronic presentation of the financial report is management’s responsibility. Matters arising include:


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(a) the nature and extent of financial information provided on the entity’s web site and the way in which financial information is associated with the audit report;

(b) the electronic format of the audited financial report;

(c) the web site construction including methods used to differentiate between audited and unaudited information;

(d) the use of hyperlinks in the audited financial report and the audit report;

(e) the security and controls over information provided on the entity’s web site to maintain the integrity of the information being presented electronically;

(f) the controls and security over updating information on the web site.

.29 The auditor considers matters affecting the electronic presentation of the audited financial report and the intended use of the audit report to determine whether: (a) the matters arising impact on the audit report to be

presented with the full financial report on the entity’s web site;

(b) the electronic audit report provided on the entity’s web site needs to be expanded to specifically refer to the audited statements by name or to include additional information regarding the electronic presentation of the financial report (refer paragraph .41); or

(c) in extreme circumstances, permission for the electronic presentation of the audit report is to be denied.

.30 The auditor documents communications with management regarding the use of the audit report on an entity’s web site to record the auditor’s reasoning on matters relating to the security and completeness of audited financial information provided on a web site.

.31 If the auditor is not satisfied that management has addressed matters relating to the electronic presentation of the audited financial report and audit report on the entity’s web site, the auditor notifies management in writing that inclusion of the audit report on the web


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site is not appropriate, and that information presented on the web site is not to be referred to as audited information.

.32 After the financial report has been issued, the auditor has no obligation to make any inquiry regarding the financial report. However, if the auditor becomes aware that the audit report is being used inappropriately on the entity’s web site, the auditor notifies the entity that the audit report is to be withdrawn immediately.

.33 In those circumstances where the auditor has expressed concerns about the electronic presentation of the audited financial report or the audit report, and appropriate action is not taken by management, the auditor seeks legal advice as necessary.

Other Information in Documents Containing Audited Financial Reports

.34 AUS 212 requires the auditor to read the other information to identify material inconsistencies with the audited financial report. Although AUS 212.10 acknowledges that the auditor has no specific responsibility to determine that other information is properly stated, AUS 212.13 and .17 specify the action required if the auditor identifies a material inconsistency or material misstatement of fact.

.35 When the financial report is produced in hard copy format, the auditor reads the other reports and commentaries which are to be included with the printed audited financial report, to identify whether any material inconsistencies or misstatements of fact exist.

.36 The basic principles and essential procedures identified in AUS 212 also apply when the audited financial report is included in an electronic format on a web site. Ordinarily, the audited financial report is separately identified by an icon or hyperlink placed in the investor information or financial results section of the web site. The way in which the web site is constructed to segregate financial information from other information, and the way in which the audited financial report is placed in the investor information section, influences the extent to which other information is considered to be presented with the audited financial report (refer to Appendix 1).

.37 The legal framework for electronic documents is not yet well established regarding what constitutes an “electronic document” for electronic reporting purposes. Therefore, having regard to legal developments, the auditor uses professional judgement to determine what other information presented with the annual report on the web site is to be read in accordance with AUS 212.


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Management Representations

.38 Representations from management regarding acknowledgment of its responsibility for the presentation of the financial report, may need to be expanded when the audited financial report and audit report are presented on a web site. Therefore in respect of the electronic presentation of audited financial information, the auditor may consider obtaining specific representations from management that: (a) the electronic presentation of the financial report is

management’s responsibility;

(b) the electronic version of the audited financial report and audit report presented on the web site are the same as the final signed version of the audited financial report and audit report;

(c) management has clearly differentiated between audited and unaudited information in the construction of the entity’s web site and understands the risk of potential misrepresentation in the absence of appropriate controls;

(d) management has assessed the security controls over audited financial information and the audit report and is satisfied that procedures in place are adequate to ensure the integrity of the information provided;

(e) where the audit report on the full financial report is provided on the web site, the financial report is also provided in full (refer paragraphs .39-.44).

The Electronic Audit Report

.39 AUS 702 “The Audit Report on a General Purpose Financial Report” identifies the basic principles and essential procedures in respect of an audit report on general purpose financial reports. AUS 802 “The Audit Report on Financial Information Other Than a General Purpose Financial Report” and AUS 902 “Review of Financial Reports” identify the basic principles and essential procedures in respect of other reports. The basic principles and essential procedures described in these auditing standards do not change in an electronic reporting medium. Matters arising regarding the electronic presentation of the audit report are discussed with management during the course of the audit (refer paragraph .28).


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.40 The audit or review report relates to the financial report presented as a whole. Therefore the report is not associated with the components of that information (refer paragraph .38(e)).

.41 In response to the matters noted in this AGS the auditor considers providing a separate audit report for electronic presentation on the entity’s web site (refer Appendix 4). The audit report provided for presentation on an entity’s web site includes the additional information given below:

(a) specific reference to the audited statements by name;

(b) advice to readers that the report refers only to the statements named in the audit report and does not provide an opinion on any other information which may have been hyperlinked to/from the audited financial report;

(c) advice to readers, who may be concerned with the inherent risks arising from electronic data communications, to consider reference to the hard copy of the entity’s financial report to confirm the information included in the audited financial report presented on the entity’s web site.

Appendix 4 provides an example of an audit report which includes reference to matters relating to the electronic presentation of the audited financial report, provided for presentation on an entity’s web site.

.42 When a separate audit report is provided to the entity for electronic presentation on the entity’s web site, the auditor considers events occurring up to the date of signing of this audit report in accordance with AUS 706 “Subsequent Events”.

.43 When extracts from the audited information are presented on the web site, or summarised financial reports (derived from the audited financial report), are presented on the web site, it is management’s responsibility to have regard to the legal provisions relating to the distribution of financial reports. Most reporting frameworks require the entity to include a statement regarding the status of the information provided on the web site and the availability of the full financial report (refer Appendix 5).

.44 Alternatively, the auditor may be engaged to provide a special purpose report in accordance with AUS 802 “The Audit Report on Financial Information Other Than a General Purpose Financial Report” on the summarised financial report.


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Operative Date

.45 This AGS, which incorporates amendments made by AUS/AGS Omnibus 3 “Miscellaneous Amendments to AUSs and AGSs”, is operative from July 2002. This version of AGS 1050 supersedes AGS 1050 “Audit Issues Relating to the Electronic Presentation of Financial Reports”, as revised in December 1999.

Compatibility with International Standards and Statements on Auditing

.46 There is no corresponding International Standard or Statement on Auditing.


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APPENDIX 1

THE ELECTRONIC PRESENTATION OF INFORMATION ON THE ENTITY’S WEB SITE

Background Information

.01 The nature and extent of financial information provided by an entity on a web site is determined by management and may include both audited and unaudited information. Financial information is often provided as a separate section such as “Investor Information” or “Financial Results”, and in addition to financial statements may include items such as: Key dates Company profile Dividend information Shareholder privileges Annual general meeting Share Registrars Share prices Credit ratings Review of operations Media releases Analyst presentations Frequently asked questions.

.02 “Financial results” may also include a selection of information including for example:

Interim results Financial highlights Financial statements Full audited financial report Selected financial data.

.03 The nature of information presented on a web site is inherently transient, as one of the advantages of using a web site for communication is that information can be updated frequently to provide the latest information available.

The Electronic Presentation of Audited Financial Reports

.04 When an entity uses a public network, such as the Internet, for the presentation of financial information, management needs to consider


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the legal provisions relating to the distribution of financial reports. Although the application of reporting regulation in an electronic medium is not yet well established in law, there is existing regulation applying to financial reports produced in hard copy which needs to be recognised.

.05 It is management’s responsibility to ensure that the information provided to users on the entity’s web site is not misleading.

.06 When the financial information presented on a web site includes an audit report, or when information includes financial information that has the appearance of being audited, there is the potential for audit association to be implied. It is management’s responsibility to implement controls:

(a) to clearly differentiate and/or segregate audited and unaudited information;

(b) to limit or prohibit the association of audited with unaudited information though the use of hyperlinks; and

(c) to protect the security of audited financial information.

The Structure of the Web Site

.07 Ordinarily, the annual financial report is included as a separate icon or hyperlink on the entity’s web site under a category such as “Financial Information” or “Investor Relations”. The inclusion of audited information as part of a composite icon increases the difficulty for users to identify and differentiate between audited and unaudited information.

.08 Electronic documents presented on a web site frequently contain hyperlinks to other information for ease of access. Therefore hyperlinks may be established in documents on the entity’s web site to other documents on the entity’s web site or to a source of information external to the entity, which in turn includes hyperlinks. The information provided in hyperlinked documents or external sites may also be subject to frequent changes.

.09 When audited financial information contains hyperlinks to web pages containing unaudited financial information, the audit report may be associated with the unaudited information. Therefore the way in which hyperlinks to/from the electronic audited financial report are used may impact on the way information on the web site is associated with the audit report.


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Security and Integrity of the Electronic Financial Report

.10 The entity is responsible for the electronic presentation of financial information on its web site. Therefore security and control issues addressed by management include:

(a) the public release of financial information;

(b) the frequency of changes to financial information provided on a web site;

(c) the security controls to prevent and detect unauthorised changes over financial information on the entity’s web site; and

(d) the planning, construction and maintenance of the entity’s web site, to reduce the risk of inappropriate association of unaudited information with the audit report.

.11 In the absence of appropriate security measures, information on the Internet might be changed or manipulated without the knowledge of the entity. Therefore the entity is responsible for implementing an appropriate security infrastructure and control procedures to ensure that changes are not only properly authorised, but that all changes can be detected and monitored.


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APPENDIX 2

EXAMPLE OF A PARAGRAPH FOR INCLUSION IN AN ENGAGEMENT LETTER PROVIDING REFERENCE TO THE ELECTRONIC PRESENTATION OF AN AUDITED FINANCIAL REPORT

AND AUDIT REPORT

The following paragraph provides an example of matters for inclusion in an engagement letter or other suitable form of engagement contract, regarding the electronic presentation of audited financial information:

“It is our understanding that [the entity] intends to publish a hard copy of the audited financial report and audit report for members, and to electronically present the audited financial report and audit report on its web site. When information is presented electronically on a web site, the security and controls over information on the web site should be addressed by [the entity] to maintain the integrity of the data presented. The examination of the controls over the electronic presentation of audited financial information on the entity’s web site is beyond the scope of the audit of the financial report. Responsibility for the electronic presentation of the financial report on the entity’s web site is that of the governing body of [the entity].”


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APPENDIX 3

FACTORS IMPACTING ON THE ELECTRONIC PRESENTATION OF THE AUDIT REPORT

.01 This Appendix considers how the electronic presentation of the audit report impacts on certain traditional characteristics of that report.

Use of Page Numbers to Identify Audited Information.

.02 When the annual report is produced in a hard copy format the audit report often identifies the financial report which has been audited by reference to page numbers. Page numbers are not ordinarily a suitable method of identifying particular financial information presented on a web site.

.03 Page numbers may be appropriate to identify audited financial information when the annual report has been included in PDF format on the web site. However, PDF files are often very large and may take a considerable time to download, therefore a move away from the use of PDF is anticipated as web technology continues to develop. While PDF allows a reasonably secure electronic medium to communicate information, other web languages may not be as secure, and without appropriate controls in place may be subject to deliberate and accidental manipulation.

.04 Audited information is clearly identified on the entity’s web site in a manner appropriate to the electronic format used by the entity. For example, audited information may be segregated from other financial information on the web site by a separate icon or hyperlink, or may be identified by a particular colour border/margin on the screen, or unaudited information may be clearly labelled “unaudited”. The appropriate mode of differentiation between audited and unaudited information will be dependent on the electronic format selected, and the nature and extent of other information presented on the web site.

Use of an Auditor’s Signature as Authentic Identification of the Auditor

.05 The auditor’s signature traditionally provides authentic identification of the auditor. However, the context for its use changes in an electronic medium where the information presented may not be adequately protected from modification. Hence, depending on the format in which that information is presented, a signature copied into an electronic medium may have limited value


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as an indicator of both the authenticity of the signatory and the message (the audit report) to which it is attached.

.06 In certain circumstances authentication of the audit report may be achieved through the use of cryptography, for example to record a digital signature, to ensure that messages and other documents have not been tampered with.

Date of the Audit Report

.07 The date on the audit report traditionally indicates the date up to which subsequent events have been reviewed. If audited and unaudited financial information is not clearly segregated on the entity’s web site, a user may not be able recognise that there is a distinction between the two sets of information. The audit report may then become associated with information which has been updated subsequent to the issue of the audit report.


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APPENDIX 4

EXAMPLE OF AN AUDIT REPORT PROVIDED FOR PRESENTATION ON AN ENTITY’S WEB SITE

The audit report below is an example of an audit report provided for presentation on a corporate entity’s web site. This report would need to be adapted to reflect the audit mandate, as appropriate, for non-corporate entities.

INDEPENDENT AUDIT REPORT

To the members of [name of entity]:

Matters Relating to the Electronic Presentation of the Audited Financial Report

This audit report relates to the financial report of [name of entity] for the year ended 30 June 19X1 included on [name of entity’s] web site. The [company/registered scheme/disclosing entity]’s directors are responsible for the integrity of the [name of entity’s] web site. We have not been engaged to report on the integrity of the [name of entity’s] web site. The audit report refers only to the statements named below. It does not provide an opinion on any other information which may have been hyperlinked to/from these statements. If users of this report are concerned with the inherent risks arising from electronic data communications they are advised to refer to the hard copy of the audited financial report to confirm the information included in the audited financial report presented on this web site.

Scope

We have audited the financial report of [name of entity], comprising the Profit and Loss Statement, the Balance Sheet, the Statement of Cash Flows, Notes A to Z and the Director’s Declaration for the year ended 30 June 19X1. The [company/registered scheme/disclosing entity]’s directors are responsible for the financial report. We have conducted an independent audit of the financial report in order to express an opinion on it to the members of the company.

Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance whether the financial report is free of material misstatement. Our procedures included examination, on a test basis, of evidence supporting the amounts and other disclosures in the financial report, and the evaluation of accounting policies and significant accounting estimates. These procedures have been undertaken to form an


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opinion whether, in all material respects, the financial report is presented fairly in accordance with Accounting Standards and other mandatory professional reporting requirements and statutory requirements so as to present a view which is consistent with our understanding of the [company/registered scheme/disclosing entity]’s financial position, and performance as represented by the results of its operations and its cash flows.

The audit opinion expressed in this report has been formed on the above basis.

Audit Opinion

In our opinion, the financial report of [name of entity] is in accordance with: (a) the Corporations Act 2001, including:

(i) giving a true and fair view of the [company/registered scheme/disclosing entity]’s financial position as at 30 June 19X1 and of its performance for the year ended on that date; and

(ii) complying with Accounting Standards and the Corporations Regulations; and

(b) other mandatory professional reporting requirements.

Date Firm Address Partner


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APPENDIX 5

EXAMPLE OF INFORMATION PROVIDED TO USERS WHEN EXTRACTS FROM THE AUDITED FINANCIAL REPORT ARE INCLUDED ON AN

ENTITY’S WEB SITE

Where extracts or summarised financial reports derived from the audited financial report, are presented on the web site, management includes a statement regarding the status of that information and the availability of the full financial report.

For example:

The financial information presented on this web site represents extracts from the audited financial report of XYZ Limited for the financial year ended 30 June 19X1 issued on [date]. These extracts cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the entity as a reading of the complete financial report.

The complete financial report, and the audit report thereon, can be obtained, free of charge, on request to the entity [[email protected]].