International Standard on Auditing 705: Modifications to the Opinion in the Independent Auditor’s Report provides guidance on how auditor’s report needs to be modified if expressing a normal opinion is not appropriate in case financial statements are misstated.
Auditor shall express a qualified opinion if:
- having obtained sufficient appropriate audit evidence, auditor concludes that misstatements in the financial statements are material but not pervasive
- auditor is unable to obtain sufficient appropriate audit evidence that financial statements thus unable to form an opinion. However, concludes that undetected misstatements could be material but no pervasive
Auditor shall express an adverse opinion as a result of obtaining sufficient appropriate audit evidence auditor concludes that misstatements are material but also pervasive.
Auditor shall express a disclaimer if auditor is unable to obtain sufficient appropriate audit evidence and thus cannot form an opinion but concludes that undetected misstatements could be both material and pervasive.