International Standards on Auditing for Cayman Funds (2016)

1. 1
Illustration only – always tailor to specific circumstances
INDEPENDENT AUDITOR’S REPORT
To the Shareholders of ABC Fund
Report on the Audit of the Financial Statements
Opinion
1. We have audited the financial statements of ABC Fund (the “Fund”), which comprise the statement of financial
position as at December 31, 2016, and the statement of comprehensive income, statement of changes in net assets
attributable to holders of redeemable participating shares and statement of cash flows for the year then ended, and
notes to the financial statements, including a summary of significant accounting policies.
2. In our opinion, the accompanying financial statements present fairly, in all material respects, (orgive a true and fair
view of) the financial position of the Fund as at December 31, 2016, and(of) its financial performance and its cash
flows for the year then ended in accordance with International Financial Reporting Standards (IFRS).
Basis for Opinion
3. We conducted our audit in accordance with International Standards on Auditing (ISA). Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements
section of our report. We are independent of the Fund in accordance with the International Ethics Standards Board
for Accountants’ Code of Ethics for Professional Accountants (IESBA Code), and we have fulfilled our other ethical
responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Material Uncertainty Related to Going Concern
4. We draw attention to Note X in the financial statements; the Fund incurred a net loss of $$$ and net redemptions
of $$$ during the year ended December 31, 2016. In addition, as disclosed in the Subsequent Events Note Y, the
Fund received further redemption requests amounting to $$$. As stated in Note Z, these events and conditions,
along with other matters as set forth in Note Z, indicate that a material uncertainty exists that may cast
significant doubt on the Fund’s ability to continue as a going concern. Our opinion is not modified in respect of
this matter.
Key Audit Matters
5. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
thesematters. In addition to the matter described in the Material Uncertainty Related to Going Concern section, we
have determined the matters described below to be the key audit matters to be communicated in our report.
Valuation of Financial Instruments
6. The Fund’s investments in structured financial instruments represent X% of the total amount of its Net Asset Value.
Due to their unique structure and terms, the valuation of these instruments are based on entity-developed internal
models asdisclosedinNoteWandnotonquotedpricesinactivemarkets.Therefore,thereissignificantmeasurement
uncertainty involved in this valuation. As a result, the valuation of these instruments was significant to our audit, and
primarily addressed by our work in reviewing of the report of an independent valuation specialist.

2. 2
Emphasis of Matter
7. We draw attention to Note Y of the financial statements, which describes the material value of redemption requests
received by the Fund subsequent to the year end, as a result of which the Fund has imposed a gate on redemptions.
Our opinion is not modified in respect of this matter.
Other Information
8. Management is responsible for the other information. The other information comprises the [Directors’ Report],
but does not include the financial statements and our auditor’s report thereon, which we obtained prior to the
date of this auditor’s report, and the [Investment Manager’s Report], which is expected to be made available to
us after that date.
9. Our opinion on the financial statements does not cover the other information and we do not [and will not]
express any form of assurance conclusion thereon.
10. In connection with our audit of the financial statements, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
11. If, based on the work we have performed on the other information that we obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are required
to report that fact. We have nothing to report in this regard.
12. When we read the [Investment Manager’s Report], if we conclude that there is a material misstatement therein,
we are required to communicate the matter to those charged with governance and [describe actions applicable
in the jurisdiction.]
Responsibilities of Management and Those Charged with Governance for the Financial Statements
13. Management is responsible for the preparation and fair presentation of the financial statements in accordance
with IFRS, and for such internal control as management determines is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
14. In preparing the financial statements, management is responsible for assessing the Fund’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless management either intends to liquidate the Fund or to cease operations, or has no
realistic alternative but to doso.
15. Those charged with governance are responsible for overseeing the Fund’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
16. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISA will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these financialstatements.

3. 3
17. [A further description of the auditor’s responsibilities for the audit of the financial statements is located at
[Organisation’s] website at: [website link]. This description forms part of our auditor’s report.]
18. As part of an audit in accordance with ISA, we exercise professional judgment and maintain professional
scepticism throughout the audit. Wealso:
i. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
ii. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the Fund’s internal control.
iii. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management.
iv. Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Fund’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Fund to cease to continue as a going concern.
v. Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
vi. [Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial statements. We are responsible for the
direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.]
19. We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
20. We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
21. From the matters communicated with those charged with governance, we determine those matters that were
of most significance in the audit of the financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances,we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
22. Report on Other Legal and Regulatory Requirements…

4. 4
Other Matter
23. This report, including the opinion, has been prepared for and only for the Fund’s shareholders as a body and for no
other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come.
24. The engagement partner on the audit resulting in this independent auditor’s report is [name].
25. Signature in the name of the audit firm [or personal name of the auditor, or both, as appropriate for the particular
jurisdiction]
26. Auditor Address
27. Date

5. David Walker
Candice Czeremuszkin
Etienne Jensen-Fontaine
18 October 2016
International
Standards on
Auditing (2016)
with a focus on
Cayman Funds
1

6. DISCLAIMER
CIIPA and the presenters disclaim any
responsibility or liability resulting from the
use and application of this presentation.
2

7. AGENDA
1. Audit Planning Considerations
2. Internal Controls & Risk Assessment Considerations
3. Auditing Specific Accounting Cycles
4. Audit Completion, New & Revised Auditor Reporting
Standards
3

8. 1. Audit Planning
Considerations
4

9. AUDIT PLANNING CONSIDERATIONS
Service
Providers
Engagement
(Re-)
Acceptance
Requirements
&
Deliverables
New
Requirements
Fraud & Risk
Assessments
Preliminary
Analytical
Review
Deadlines &
Timetable
Audit
Planning &
Documentation
5

10. • Audit planning meeting
• Fund structure, ownership and related parties
• Inherent risks of the Fund’s FS assertions
• Controls implemented over the FS assertions
• Internal controls and any changes
• FS format for the current year, and any issues such as:
‒ Expected modifications to the audit report
‒ Non-standard or subjective disclosures
‒ Consider IAS 1 (Revised) effective for periods ≥ 1 Jan 2016
‒ ISA’s revised by IAASB Disclosures project effective for periods ≥ 15 Dec 2016
‒ Valuation and liquidity risks and estimates
‒ Significant legal issues or expenses
‒ Any lock-up periods, NAV suspension, gates
‒ Going concern assessment, and any known subsequent events 6
AUDIT PLANNING CONSIDERATIONS

11. AUDIT PLANNING CONSIDERATIONS
• Applicability of any prior year audit issues
• Staffing & staff supervision
• What controls may be relied upon effectively
• Related party transactions and disclosures
• Support for the valuation and disclosures of Level 3 investments
• NAV restatements or estimated values
• Investor side-letters, side pockets, complaints, capital transactions
pending, missing due diligence
• Board minutes & resolutions & latest offering documents
• Plan and execute necessary audit confirmation requests
• Going concern assessment
• Communication with Those Charged with Governance 7

12. AUDIT PLANNING CONSIDERATIONS:
LAWS & REGULATIONS (ISA 250)
RiskResponse
ReportingRiskAssessment
• Is material non-compliance disclosed/reported if required?
• Report to Those Charged with Governance
• Obtain management representations
• Identify any non-
compliance
• Discuss with management,
if appropriate
• Evaluate impact
• Legal & regulatory
framework for funds
• How entity is complying?
• Inquire about
compliance
• Review regulatory
correspondence
8

13. AUDIT PLANNING CONSIDERATIONS:
LAWS & REGULATIONS
• IAASB (2015) Handbook of International Quality Control, Auditing, Other
Assurance, and Related Service Pronouncements IAASB.org
• IESBA Code of Ethics for Professional Accountants
• Directors Registration and Licensing Law, 2014
• Companies Law (2016 Revision), Mutual Funds Law (2015 Revision)
• Mutual Funds (Annual Returns) Regulations (Revised)
• The Confidential Information Disclosure Law, 2016
• Proceeds of Crime Law (2016 Revision)
• Money Laundering Regulations (2013 Revision)
• Financial Reporting Authority (CAYFIN) FRA.gov.ky
• Judicial.ky/Laws/Cayman-Enacted
• CImoney.com.ky/Regulatory_Framework/default.aspx?id=358
9

14. AUDIT PLANNING CONSIDERATIONS:
DRAFT LAWS & REGULATIONS
• IAASB.org/Projects
• The Accountants (Quality Assurance) Regulations, 2016
• The Accountants (Disciplinary) Regulations, 2016
• The Accountants (Application, Renewal and Fees) Regulations, 2016
• The Auditors Oversight (Amendment) Bill, 2016
• The Monetary Authority (Amendment) Bill, 2016
• IFRS Conceptual Framework for Financial Reporting, ED/2015/3
• IFRS Practice Statement: Application of Materiality to Financial
Statements, ED/2015/8.
• gov.ky/portal/page/portal/gazhome/publications/extraordinary-
gazettes-supplements/2016
10

15. AUDIT PLANNING CONSIDERATIONS:
RELATED PARTIES
ReportingRiskAssessment
• Has sufficient appropriate evidence been obtained?
• Does a material misstatement exist?
• Is financial statement disclosure adequate?
• Obtain management representations. Report on any findings.
• Any indication of undisclosed
related parties?
• Obtain support for management’s
assertions about the nature, extent,
and purpose of transactions
• If consider significance,
measurement and recognition of
transactions, as well as any fraud
risk
• Identify related parties,
including and any changes
• Understand nature, extent,
& purpose of transactions
• Consider potential for fraud
• Remain alert for
undisclosed related-party
transactions
11RiskResponse

16. AUDIT PLANNING CONSIDERATIONS:
WORKING WITH OTHER AUDITORS / REISSUES /
LOCAL AUDIT SIGN-OFF ENGAGEMENTS
• Involves different Audit
Practitioners at different
locations:
• Cayman “Principal Auditor”
signs audit report, where the
Fund is domiciled;
• “Other Auditor” in different
jurisdiction where
management or records
based.
• Cayman Practitioner:
• Sign the Engagement Letter
• Supervises Other Auditor
• Review Other Auditor’s work
• Cayman auditor involvement
in audit planning, risk
assessment and review:
‒ Which auditor is
responsible for
communication to the
Directors?
‒ Can the auditors
effectively collaborate to
meet the client deadline?
‒ Does the “Other auditor”
have adequate funds audit
experience?
12

17. ISA 600 — Special Considerations:
Audits of Group Financial Statements
(Including the Work of Component Auditors)
ISA 220, Quality Control for an Audit of Financial Statements:
• Applies to all audit engagements conducted under ISA.
ISQC 1: Applies to all firms conducting audits under ISA.
ISA 600: May also be useful for other situations where an auditor involves
another auditor in some part of the audit of financial statements.
• This could include… performing specific procedures at a remote location.
IAASB Staff Audit Practice Alert (August 2015): RESPONSIBILITIES OF THE
ENGAGEMENT PARTNER IN CIRCUMSTANCES WHEN THE ENGAGEMENT
PARTNER IS NOT LOCATED WHERE THE MAJORITY OF THE AUDIT WORK IS
PERFORMED
• The auditor may find ISA 600, adapted as necessary in the circumstances,
useful when the auditor involves other auditors in the audit of financial
statements that are not group financial statements. 13

18. 1. Audit Planning
Considerations
QUESTIONS?
14

19. 2. Internal Controls &
Risk Assessment
Considerations
15

20. INTERNAL CONTROL & RISK ASSESSMENT
If placing reliance on an internal controls assurance report:
• Type two report with an unmodified opinion?
• Free from relevant findings?
• Are all critical controls tested?
• Are the service auditors reputable?
• For critical controls, review procedures, results, and assess the
impact of any exceptions
• Document the audit risk assessment and resultant audit
approach
AND/OR: Perform controls reliance testing.
REMEMBER: Consider prior year audit adjustments and any
other significant deficiencies. 16

21. • Confirmations
• Proof-in-total roll-
forward calculations
• Substantive analytical
review procedures
• Tests of detail
• Walkthroughs
• Tests of control
• Substantive
procedures
• May we rely on controls?
• Service auditor’s report?
• Risks of fraud?
• Risks of errors?
• Substantive analytical review?
INTERNAL CONTROL & RISK ASSESSMENT:
DOCUMENTATION
Only rely on
documented controls
that are evidenced to
work
17

22. INTERNAL CONTROL & RISK ASSESSMENT:
SMALLER ENTITIES
Certain relevant control activities at smaller entities might mitigate:
• Significant risks
• Risks that cannot easily be addressed by substantive procedures
• Other risks of material misstatement
Auditor’s judgment about whether a control is relevant to the audit is influenced by:
• Knowledge of any other relevant control activities identified
• The existence of multiple control activities that achieve the same objective
• Increased efficiency from testing the operating effectiveness of certain key controls
Control Activities in Smaller Entities
Informal and Limited Documentation
Limited Scope
Risks May be Mitigated by the Control Environment
18

23. Internal Control & Risk Assessment:
MANAGEMENT OVERRIDE
Management override and fraudulent revenue recognition are
presumed to be significant risks and as a result, there are certain
audit procedures that would be performed in every audit.
Procedures to Address Management Override Risk
Examine:
• Journal Entries
• Estimates
• Significant Transactions
• Revenue Recognition
19

24. 2. Internal Controls &
Risk Assessment
Considerations
QUESTIONS?
20

25. 3. Auditing Specific
Accounting Cycles
21

26. Auditing Specific Accounting Cycles –
OPENING BALANCES
Obtain sufficient and appropriate audit evidence about whether:
• Opening balances contain material misstatements, by
• Agree prior year closing balances to current year opening balances;
• Determine whether the opening balances reflect the application of
appropriate accounting policies; and verify the opening balances by:
• Review any predecessor auditor working papers; or
• Evaluate relevant procedures performed in the current year; or
• Perform specific procedures to obtain evidence regarding opening
balances.
• Any changes in Accounting policies are appropriately accounted for
and adequately disclosed in accordance with IFRS.
22

27. Auditing Specific Accounting Cycles –
CASH AND CASH EQUIVALENTS,&
DUE FROM/TO BROKERS
Document an understanding of controls
Justify any reliance on controls
Reconcile balances to lead schedules, FS and audit confirmations
Investigate reconciling or unusual items
Verify FX rates
Verify credit facility limits, any breaches, any facility renewal dates
Review offsetting disclosures for validity and transparency
Review post year-end statements
Evidence any charges over assets, restricted balances, collateral &
related FS disclosures
Recalculate cash flow statement workings
23

28. Auditing Specific Accounting Cycles: INVESTMENTS
Assess any
MANAGEMENT
ESTIMATES for
reasonableness
and related FS
disclosures
DOCUMENT
WHETHER
ADDITIONAL
WORK IS
REQUIRED
Review post-year end portfolio
Confirm observable prices
independently
Audit any valuation techniques
Consider additional
procedures for significant
related party transactions
Confirm quantities with custodian
Analytical review
Investment roll
forward
calculation
Obtained sufficient and
appropriate audit evidence
for Level 3 investments
especially
Audit the valuation,
classification, levelling and
risk disclosures
Review any breaches of
restrictions/policy/strategy
Query any unusual investments or
investment transactions
24

29. Auditing Specific Accounting Cycles:
INVESTMENTS
Document and justify any reliance on controls
Reconcile balances to lead schedules, FS and audit confirmations
Investigate reconciling or unusual items, and FX rates
Auditing the Statement of comprehensive income
• Interest & dividend income
• Other net changes in FV on financial assets and liabilities at FVTPL
Side pockets or designated investments
Audit FS disclosures, including:
• Qualitative and quantitative risk disclosures
• Management’s methods to monitor and mitigate risk
• Offsetting disclosure requirements
25

30. Auditing Specific Accounting Cycles:
INVESTMENTS
IESBA Handbook of the Code of Ethics for Professional Accountants
(2016):
Audit clients that are public interest entities:
290.176 A firm shall not provide valuation services… if the valuations
would have a material effect, separately or in the aggregate…
Audit clients that are not public interest entities:
290.175 …if the valuation service has a material effect… and the valuation
involves a significant degree of subjectivity, no safeguards could reduce
the self-review threat to an acceptable level… a firm shall not provide such
a valuation service...
Take care with any Audit Adjustments to client investment valuations,
especially if material, subjective, or for a PIE 26

31. Auditing Specific Accounting Cycles: SHARE CAPITAL
Recalculate were applicable:
• NAV/share at Y/E
• Analytical review of
NAV/share per class
• Financial Highlights
DOCUMENT
WHETHER
ADDITIONAL
WORK IS
REQUIRED
Share capital roll-forward
recalculation:
• Agree opening to prior
year
• Agree movement and
closing amounts to an
audit confirmation
• Agree FS disclosures
Document & test allocation of income/expenses between share classes.
Only repy on documented controls that are evidenced to work.
Review any gates, suspensions, or investor lock-in agreements.
Sample:
• Subs, Reds &
Transfers
• Signed investor
instructions
• Transaction
authorisation
• Recalculate using
NAV/share at
transaction date
• Agree bank receipt /
payment / in-kind
transfer
• Verification of investor 27

32. Auditing Specific Accounting Cycles:
EXPENSES & OTHER RECEIVABLES/PAYABLES
NAV-Based Fees
• Recalculate a sample or total based on the service-agreement or prospectus
• Fees payable at year-end might be verified to after date settlement
• Review breakdown of payments during the year and consider analytical techniques
Other Expenses
• Review any significant legal fee invoices
• Directors’ fees to be compared with FS disclosures, OM, directors’ service agreements
• Consider whether any expenses are contrary to the offering document
Other Payables/Receivables
For significant balances, obtain adequate support, e.g.:
• Any post year end settlement
• Outstanding invoices
• Settlement terms and consider documenting reasons for any undue delay
Disclosure of Related Party Transactions 28

33. Auditing Specific Accounting Cycles:
GOING CONCERN – ISA 570 (Revised)
Change in terminology from going concern assumption to going concern
basis of accounting
ALL auditor report’s will now include:
• New description of management’s responsibility for assessing the
entity’s ability to continue as a going concern and whether the use of
the going concern basis of accounting is appropriate
• New statement that the auditor’s responsibilities are to conclude on the
appropriateness of management’s use of the going concern basis of
accounting, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast
significant doubt on the entity’s ability to continue as a going concern.
• Use of the term ‘Material Uncertainty Related to Going Concern’
replacing the term Emphasis of Matter
What’s new
29

34. Auditing Specific Accounting Cycles:
GOING CONCERN
Determine:
• Does a material uncertainty exists in relation to the
identified issue?
• Is the going concern basis of accounting appropriate?
• Are the FS disclosures sufficient?
Obtain management representations
Consider management’s
assessment of issues that
may cast doubt on the going
concern basis of
accounting:
• Review management’s
assessment
• Remain alert for possible
conditions or events
For any issues are identified:
• Evaluate management’s plans
• Review management’s cash
flow forecasts
• Ask management about
events/conditions beyond
their assessment period
• Consider any additional facts
or information available
RiskResponse
Reporting
Risk
Assessment
30

35. Any events that
may cast
significant
doubt on entity's
ability to
continue
as a going
concern?
Ask management
for a preliminary
assessment of the
entity’s ability to
continue as a
going concern
YES
Discuss any issues
with management
and obtain their
response
Remain alert
throughout audit for
evidence of
events/conditions that
may cast significant
doubt on entity's
ability to continue as a
going concern.
Identify any events/
conditions and obtain
management’s action plans
in response
Conclude if a material
uncertainty exists or
if the going concern
basis of accounting
is inappropriate
Auditing Specific Accounting Cycles:
GOING CONCERN
NO
Evaluate management’s
plan of action and
supporting
documentation
31

36. Auditing Specific Accounting Cycles:
GOING CONCERN
Determine the impact of identified events/conditions on the audit report
and communicate the decision to management and those charged with
governance, where applicable:
Use of Going
Concern Basis
of Accounting
Inappropriate
Do financial
statements fully
describe events/
conditions and
disclose
existence of
material
uncertainty?
Unmodified opinion plus
“Material Uncertainty
Related to Going
Concern”
(NEW REQUIREMENT)
Express a qualified or
adverse opinion, and
state material
uncertainty exists
Express an adverse
opinion
Use of Going
Concern Basis
of Accounting
Appropriate but a
Material
Uncertainty Exists
YES
NO
32

37. Auditing Specific Accounting Cycles:
SUBSEQUENT EVENTS - OVERVIEW
RISKS:
• Erroneous disclosure or missing financial statement disclosures
• Incorrect valuations at year-end
PROCEDURES TO INCLUDE:
• Document the date to which we have identified all material subsequent
events
• Review post year end board minutes
• Review the latest NAV pack
• Review post year end subscriptions and redemptions
• Review the latest investor/shareholder newsletters
• Obtain Management confirmation of no undisclosed subsequent events
33

38. Auditing Specific Accounting Cycles:
SUBSEQUENT EVENTS - TIMELINE
Date of
Financial
Statements
Date of Management
Approval of Financial
Statements
Date of Auditor’s
Report on Financial
Statements
Date Financial
Statements Are
Issued
Obtain evidence about subsequent events
Respondto newfactsthat
becomeknown
TIMELINE
34

39. Auditing Specific Accounting Cycles:
FINANCIAL STATEMENTS REVIEW PROCESS
Document whether any additional risks are identified during
the audit fieldwork
Substantive examination of material journal entries, including
“top-side” journals (ISA 330.20)
Design and perform analytical procedures near the end of the
audit that assist forming an overall conclusion as to whether
the financial statements are consistent with the auditor’s
understanding of the entity (ISA 520.6)
Document a review of the FS and the notes
Document a review of Other Information in documents
containing audited financial statements (ISA 720)
35

40. 3. Auditing Specific
Accounting Cycles
QUESTIONS?
36

41. 4. Audit Completion,
New & Revised
Auditor Reporting
Standards
37

42. AUDIT FINALISATION CONSIDERATIONS
Seek General
Representations of:
Seek FS
Representations that:
Seek Management
Representations of any:
• Responsibilities
• Appropriate books &
records, minutes &
resolutions made available
• Material transactions
properly recorded
• Responsibility for
establishing and maintaining
adequate internal controls
• Responsibility for assessing
fraud risk
• FS presented fairly
• Reflect ownership
• Investments, other assets &
liabilities, valued per
prospectus, FS disclosures
and accounting policies
complete and correct
• Subsequent events are
disclosed / adjusted for
• All related party
transactions disclosed
• Breaches of law, regulation,
investment restriction or
prospectus
• Investor complaints
• Contingent events and any
assets / liabilties
• Significant deficiencies
identified
• Internal control weaknesses
• Adjusted & unadjusted audit
differences
The Directors Should Review and When Satisfied, Approve the
Audited Financial Statements (SoG 6.16) & Representation Letter
38

43. NEW & REVISED AUDITOR REPORTING STANDARDS
•ISA 260 (Revised) Communication with Those Charged with Governance
•ISA 570 (Revised) Going Concern
•ISA 700 (Revised) Forming an Opinion and Reporting on Financial Statements
•ISA 701 Communicating Key Audit Matters in the Independent Auditor’s Report
•ISA 705 (Revised) Modifications to the Opinion in the Independent Auditor’s
Report
•ISA 706 (Revised) Emphasis of Matter Paragraphs and Other Matter Paragraphs
in the Independent Auditor’s Report
•ISA 720 (Revised) The Auditor’s Responsibilities Relating to Other Information
•ISA 810 (Revised) Engagements to Report on Summary FS
•Conforming amendments to other ISA
39
ISA effective for periods ending on/after 15 December 2016

44. ISA 260 (Revised) Communication with Those Charged With Governance
40
• The Auditor’s Responsibilities
• Overview of the planned scope, timing and significant risks
identified
• Qualitative Aspects of Accounting Practices
• Significant Difficulties Encountered
• Significant Matters Arising Relevant to Financial Reporting
• Written Representations
• Circumstances Affecting the Audit Report
• Key Audit Matters, if any
• Auditor Independence
NEW & REVISED AUDITOR REPORTING STANDARDS

45. ISA 700 (Revised) Forming an Opinion and Reporting on Financial Statements
41
• Audit opinion is now at the start of the report.
• More explicit statement on independence, other ethical responsibilities, and
which standards or code were followed by the auditor.
• New section in the audit report when a material uncertainty over going
concern exists which refers to adequate disclosure in the FS.
• New section to cover the auditor’s work in relation to other information in the
annual report (ISA 720 (Revised))
• Going concern explanation wording clarified, referencing the going concern
“basis of accounting” concept (as separate from a “solvency” definition).
• Enhanced description of the responsibilities of management and the auditor,
(with an option to move text on certain responsibilities to an appendix or
website).
NEW & REVISED AUDITOR REPORTING STANDARDS

46. ISA 701 Communicating Key Audit Matters in the Independent Auditor’s Report
42
Applies to Listed Entities or Voluntary Adopters
• A new section in the audit report to explain key audit matters (KAM).
• A succinct description of the matter being included as a KAM, and a meaningful
summary of the audit procedures undertaken to address the matter.
• KAM are those of most significance in the audit, which are a subset of matters
communicated to TCWG:
• With a higher risk of material misstatement
• Requiring significant judgement, including accounting estimates
• Where there was a significant event or transaction in the year
• Required for any reason to have modified the Opinion
• Replaces any Emphasis of Matter / Other Matter paragraph except the new
“Material Uncertainty Related to Going Concern” paragraph, if applicable
• Wording must not imply discrete opinions on separate elements of the FS.
NEW & REVISED AUDITOR REPORTING STANDARDS

47. ISA 705 (Rev) Modifications to the Opinion in the Independent Auditor’s Report
43
NEW & REVISED AUDITOR REPORTING STANDARDS
QUALIFIED:
Material Misstatement
QUALIFIED:
Material Inability to
Obtain Audit Evidence
ADVERSE:
Material & Pervasive
Misstatement
DISCLAIMER:
Material & Pervasive
Inability to Obtain Audit
Evidence
TYPES OF
MODIFICATIONS

48. ISA 705 (Revised) & ISA 570 (Revised)
44
Qualified Opinion [Illustrative Extract as an Example]
We have audited the financial statements…
In our opinion, except for the incomplete disclosure of the information referred to in
the Basis for Qualified Opinion section of our report, the accompanying financial
statements present fairly (or do give a true and fair view of), the financial position of
the Company as at December 31, 2016, and of its financial performance and its cash
flows for the year then ended in accordance with International Financial Reporting
Standards (IFRSs).
Basis for Qualified Opinion
As discussed in Note YY, the Company’s financing arrangements expire and the
amounts outstanding are payable on December 31, 2016. The Company has been
unable to conclude re-negotiations or obtain replacement financing. This situation
indicates that a material uncertainty exists that may cast significant doubt on the
Company’s ability to continue as a going concern. The financial statements do not
adequately disclose this matter.
NEW & REVISED AUDITOR REPORTING STANDARDS

49. ISA 705 (Revised) & ISA 570 (Revised)
45
Adverse Opinion [Illustrative Extract as an Example]
We have audited the financial statements…
In our opinion, because of the omission of the information mentioned in the Basis for
Adverse Opinion section of our report, the accompanying financial statements do
not present fairly (or do not give a true and fair view of), the financial position of the
Company as at December 31, 2016, and of its financial performance and its cash
flows for the year then ended in accordance with International Financial Reporting
Standards (IFRSs).
Basis for Adverse Opinion
The Company’s financing arrangements expired and the amount outstanding was
payable on December 31, 2016. The Company has been unable to conclude re-
negotiations or obtain replacement financing and is considering filing for
bankruptcy. This situation indicates that a material uncertainty exists that may cast
significant doubt on the Company’s ability to continue as a going concern. The
financial statements do not adequately disclose this fact.
NEW & REVISED AUDITOR REPORTING STANDARDS

50. ISA 705 (Rev) Modifications to the Opinion in the Independent Auditor’s Report
46
Disclaimer of Opinion [Illustrative Extract as an Example]
We were engaged to audit the financial statements of ABC Fund…
We do not express an opinion on the accompanying financial statements of the Fund.
Because of the significance of the matter described in the Basis for Disclaimer of
Opinion section of our report, we have not been able to obtain sufficient appropriate
audit evidence to provide a basis for an audit opinion on these financial statements.
Basis for Disclaimer of Opinion…
Responsibilities of Management and TCWG for the FS…
Auditor’s Responsibilities for the Audit of the Financial Statements
Our responsibility is to conduct an audit of the Fund’s financial statements in
accordance with International Standards on Auditing and to issue an auditor’s report.
However, because of the matter described in the Basis for Disclaimer of Opinion section
of our report, we were not able to obtain sufficient appropriate audit evidence to provide
a basis for an audit opinion on these financial statements.
We are independent…
NEW & REVISED AUDITOR REPORTING STANDARDS

51. ISA 706 (Revised) Emphasis of Matter Paragraphs and Other Matter Paragraphs
in the Independent Auditor’s Report
47
EoM can also be required by:
• ISA 210, Agreeing the Terms of Audit Engagements – paragraph 19(b)
• ISA 560, Subsequent Events – paragraph 12 (b) and 16
• ISA 800, Special Considerations – Audits of Financial Statements Prepared
in Accordance with Special Purpose Frameworks – paragraph 14
Other Matter paragraph can also be required by:
• ISA 560, Subsequent Events – paragraphs 12 (b) and 16
• ISA 710, Comparative Information – Corresponding Figures and Comparative
Financial Statements – paragraphs 13-14, 16-17 and 19
• ISA 720, The Auditor’s Responsibilities Related to Other Information in
Documents Containing Audited Financial Statements – paragraph 10 (a)
NEW & REVISED AUDITOR REPORTING STANDARDS

52. ISA 250 (Revised) Consideration of Laws and Regulations in an Audit of FS
48
• Updated to reflect IESBA’s Code of Ethics for Professional
Accountants addressing Non-Compliance with Laws and
Regulations (NOCLAR)
• Effective for audit periods beginning ≥ 15 December 2017
• Pathway for auditors/professional accountants to disclose
potential non-compliance situations to appropriate public
authorities without constraints of the ethical duty of
confidentiality.
• Promoting compliance, preventing of non-compliance
NEW & REVISED AUDITOR REPORTING STANDARDS

53. 4. Audit Completion,
New & Revised
Auditor Reporting
Standards
QUESTIONS?
49

54. “
THANK
YOU!
50