Audit opinion is the conclusion that auditor present through audit report on whether financial statement which was audited shows true and fair view.
Before forming an opinion the auditor should conclude :
- Whether there is misstatement or scope limitation
- Whether effects of misstatement or scope limitation is immaterial, material or pervasive
Auditor should also evaluate the following:
- Whether the accounting policies selected are applied and disclosed in accordance with acceptable financial reporting framework
- Whether acceptable financial reporting framework is adequately described
- Whether accounting estimates are reasonable
- Financial statements provide adequate disclosures
- Financial statement present true and fair view (if fair presentation is used)
- If accounting policy is changed, auditor shall:
- Obtain evidence that it has been changed, applied and disclosed in accordance with acceptable financial reporting framework
- refer the changes in the auditors report
- state in auditor’s report whether he concurs with changes or not.