Letter head ng CPA and address
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Name of business
Name of owner
address
Report on the Audit of the Financial Statements
OPINION
I have audited the financial statements of name of business (owner) which comprise the
statements of financial position as at December 31, 2019 and 2018, and the statements of
financial operation, statements of changes in equity and statements of cash flows for the years
period ended, and notes to the financial statements, including a summary of significant
accounting policies.
In my opinion, the accompanying financial statements present fairly, in all material respects,
the financial position of name of business (owner) as at December 31, 2019 and 2018, and
its financial performance and its cash flows for the years then ended in accordance with the
Philippine Financial Reporting Standards for Small Entities (PFRS for SEs).
Basis for Opinion
I conducted my audits in accordance with the Philippine Standards on Auditing (PSA). My
responsibilities under those standards are further described in the Auditor’s Responsibilities
for the Audit of the Financial Statements section of my report. I am Independent of the
Company in accordance with the ethical requirements that are relevant to my audit of the
financial statements in the Philippines, the Code of Ethics for Professional Accountants in the
Philippine (Philippine Code of Ethics), and I have fulfilled my other ethical responsibilities in
accordance with these requirements. I believe that the audit evidence I have obtained is
sufficient and appropriate to provide a basis for my audit opinion.
Material Uncertainty Related to Going-Concern
Having regard to the future period to which those charged with governance have paid
particular attention in assessing going concern, I have planned and performed procedures
specifically designed to identify any material matters which could indicate concern about the
entity’s ability to continue as a going concern. As stated in Note 2, no events or conditions,
indicate that a material uncertainty exists that may cast significant doubt on the Company’s
ability to continue as a going concern. Use of going concern basis of accounting is
appropriate and no material uncertainty has been identified.
Responsibilities of Management
Management is responsible for the preparation and fair presentation of the financial
statements in accordance with PRFS for SEs, 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.
In preparing the financial statements, management is responsible for assessing the company’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 company or to cease operations, or has no realistic alternative but to do so.
Those charged with the governance are responsible for overseeing the Company’s financial
reporting process.
Auditor’s Responsibilities
My 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 my opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with PSA 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 consolidated financial
statements.
As part of an audit in accordance with PSA, I exercise professional judgment and maintain
professional skepticism throughout the audit. I also:
Identify and assesses 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 my 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.
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 Company’s internal control.
Evaluate the appropriateness of the accounting policies used and the reasonableness of the
accounting estimates and related disclosures made by management.
Conclude in 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 company’s ability to
continue as a going concern. If I conclude that a material uncertainty exists, I am required to
draw attention in my auditor’s report to the related disclosures in the financial statements or,
if such disclosure are inadequate, to modify my opinion. My conclusions are based on the
audit evidence obtained up to the date of my auditor’s report. However, future events or
conditions may cause the Company to cease to continue as a going concern.
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.
I 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 I identify during my audit.
I also provide those charged with a statement that I 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 my independence, and where
applicable, related safeguards.
From the matters communicated with those charged with governance, I determined 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. I describe these matters in my auditor’s report
unless law regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, I determine that a matter should not be communicated in my report because
the adverse consequences of doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
My audits were conducted for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplementary information to the financial statements is
presented for purposes of filing with the Bureau of Internal Revenue and is not a required part
of the basic financial statements. Such supplementary information is the responsibility of
management and has been subjected to the auditing procedures applied in my audits of the
basic financial statements. In my opinion, the supplementary information is fairly stated in all
material respects in relation to the basic financial statements taken as a whole.
CPA’s NAME and INFO
DATE
Address
