SA 700 requires the auditor to form an opinion on whether the financial statements are prepared, in all material respects, in accordance with the applicable financial reporting framework — which requires concluding on several specific things, not simply confirming that every planned procedure was completed. The auditor has to conclude that sufficient appropriate audit evidence has been obtained, that uncorrected misstatements (individually and in aggregate) are evaluated against materiality, that the financial statements adequately disclose the accounting policies used, and that the terminology and presentation are appropriate — a genuinely separate step from fieldwork finishing, performed deliberately at the end of the engagement.
What has to be concluded on, specifically
- 01Sufficiency and appropriateness of evidenceA conclusion drawn across the whole engagement, not a sum of individual area sign-offs — some evidence gaps only become visible when areas are considered together.
- 02Uncorrected misstatements, individually and in aggregateEach uncorrected item is evaluated against performance materiality individually, and the SUM of all of them against overall materiality — a set of small, individually immaterial items can still be material in aggregate.
- 03Qualitative aspects of accounting practicesWhether accounting policies are consistently applied and appropriately disclosed, and whether estimates appear reasonable, not just technically compliant with the letter of the standard.
- 04Whether the financial statements as a whole achieve fair presentationA set of financial statements can comply with every individual disclosure requirement and still, in combination, fail to give a true and fair view if the overall picture misleads — a judgment call the standard explicitly requires making.
The report's required structure
| Section | Purpose |
|---|---|
| Opinion | States the conclusion first — placed at the top of the report under SA 700's current structure, not buried after lengthy preamble |
| Basis for Opinion | States that the audit was conducted per the applicable Standards on Auditing and that the evidence obtained is sufficient and appropriate |
| Key Audit Matters (listed entities) | Required under SA 701 — the matters of most significance in the audit |
| Other Information | The auditor's responsibility regarding information in the annual report outside the financial statements themselves |
| Responsibilities of Management and TCWG / the Auditor | Clarifies who is responsible for what — a frequent source of public misunderstanding the standard addresses directly |
Common practice, not a requirement
"All procedures in the plan were completed with no exceptions noted" is not, by itself, equivalent to the SA 700 conclusion — the standard requires an explicit evaluation step connecting completed fieldwork to the specific conclusions above, documented as a conclusion, not assumed from the absence of open items.
This is practical guidance written for audit teams, not an authoritative statement of any standard or statute. Standards, forms and timelines change. Check the current text issued by the ICAI and the relevant authority before relying on anything here in an audit file.
Related resources
- Audit workflow & automationSA 705: qualified, adverse or disclaimer — choosing the right modified opinionTwo questions decide which modification applies, and they're genuinely independent of each other — getting one right doesn't tell you the other.
- Audit workflow & automationSA 701: key audit matters, and how they're actually selectedA key audit matter is drawn from what was already communicated to those charged with governance — it's a filter on that list, not a separate exercise.
- Audit workflow & automationSA 320: materiality in planning and performing an auditOverall materiality and performance materiality are not the same number with a safety margin added — they answer two different questions.
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