14.2 Legal /Statutory provisions on audit reports

Legal or statutory provisions on audit reports vary across jurisdictions and are typically established by relevant laws, regulations, and professional auditing standards. These provisions outline the requirements and responsibilities for auditors when issuing audit reports. Here are some common legal/statutory provisions related to audit reports:

1. Audit Report Format: The laws and regulations often prescribe the format and structure of the audit report, including specific headings and content that must be included.
2. Reporting Standards: Auditors are typically required to follow specific reporting standards established by regulatory bodies or professional accounting and auditing organizations. These standards define the criteria for expressing audit opinions and the required disclosures in the report.
3. Opinion Expression: The provisions may require auditors to express their opinion on the financial statements, stating whether they present a true and fair view in accordance with the applicable financial reporting framework.
4. Auditor’s Independence and Professional Skepticism: Legal provisions emphasize the importance of auditor independence and professional skepticism when conducting the audit and preparing the report.
5. Disclosure of Key Audit Matters: Some jurisdictions require the disclosure of key audit matters (KAMs) in the audit report. KAMs are those matters that the auditor considered to be of most significance during the audit.
6. Reporting on Internal Control: In certain cases, auditors may be required to report on the effectiveness of internal control over financial reporting and provide opinions or findings related to internal control deficiencies.
7. Compliance with Ethical Standards: Auditors are expected to comply with specific ethical standards and codes of conduct, including those related to integrity, objectivity, confidentiality, and professional competence.
8. Reporting on Fraud or Non-Compliance: Legal provisions may require auditors to report on any identified fraud, illegal acts, or non-compliance with laws and regulations that may have a material impact on the financial statements.