Auditor’s Report on Consolidated Financial Statements, While reporting on the consolidated financial statements (CFS) of a company under the Companies Act, 2013, the auditors may seek guidance from the illustrative formats of the auditor’s report on standalone financial statements of a company as issued by the Auditing and Assurance Standards Board (herein after referred as AASB) of the ICAI and amend the same accordingly.
Auditor’s Report on Consolidated Financial Statements
For reporting in respect of the provisions of section 143(3) and section 143(11) of the Companies Act, 2013, the auditors are suggested to consider the observations/ comments and draw suitable reference to negative comments, if any, as reported by the component auditors. The auditors of CFS are also suggested to apply the concept of materiality and professional judgment as provided in the Standards on Audit.
To provide guidance on how an auditors’ report on CFS may be prepared, the AASB of ICAI has issued some illustrative formats on the same covering some of the clauses of section 143(3) of the Companies Act, 2013. These formats may be applied for the Financial Year 2014-15 and onwards until further announcement. It is hereby mentioned again that the auditors of CFS may suitably amend these formats to suit the circumstances of their audit engagement.
Illustration: Unmodified Opinion on the Consolidated Financial Statements
The following illustrative format is based on the assumptions that: The Group has-
- Certain components which have been audited by auditor/s other than the Principal Auditor and such component/s is / are material to the consolidated financial statements of the Group. The auditors of such components which are Indian companies, there is no requirement to report on section 143(3)(i) of the Companies Act, 2013 and they did not have any matter to report under section 143(3)(f) of the Companies Act, 2013.
- Certain components which are unaudited and such component/s is/ are not material to the consolidated financial statements of the Group. The independent auditor of Consolidated Financial Statements-
- Gives an Unmodified Opinion on the consolidated financial statements.
- Disclosed the aforementioned facts about the Components in the “Other Matters” Paragraph in accordance with the Announcement issued by the Auditing and Assurance Standards Board under the authority of the Council of ICAI in February 2014.
- Does not have the responsibility to report on internal financial controls pursuant to section 143(3)(i) of the Companies Act 2013.
ILLUSTRATIVE FORMAT OF INDEPENDENT AUDITOR’S REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS OF A GROUP UNDER THE COMPANIES ACT, 2013 AND THE RULES THEREUNDER
Click Here to Download Illustrative Format for Auditors repost in Word Format