Sample Disclosure – Auditors’ Report Of Companies With Associates and or Jointly Controlled Entities But Do Not Have Any Subsidiaries (11 November 2009)
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ABC BERHAD
Report on the Financial Statements
We have audited the financial statements of ABC Berhad, which comprise the balance sheets as at 30 June 2009 of the Economic Entity and of the Company and the income statements, statements of changes in equity and cash flow statements for the year then ended of the Economic Entity and of the Company, and a summary of significant accounting policies and other explanatory notes, as set out on pages XX to XX.
Directors’ Responsibility for the Financial Statements
The directors of the Company are responsible for the preparation and fair presentation of these financial statements in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation and fair presentation of the financial statements 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Economic Entity and of the Company as of 30 June 2009 and of their financial performance and cash flows for the year then ended.
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report that in our opinion, the accounting and other records and the registers required by the Act to be kept by the Company have been properly kept in accordance with the provisions of the Act.
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.
(Name Of Audit Firm)
(Name Of Partner)
Note: This sample independent auditors’ report uses the term “Economic Entity” to describe the financial statements comprising the associates and/or jointly controlled entities ONLY with NO SUBSIDIARIES. An entity should define the composition of the “Economic Entity” in the financial statements. Other terms such as “Group” is not suitable to describe such financial statements as “Group” is defined in FRS 127, Consolidated and Separate Financial Statements to include a parent and its subsidiaries. This requirement applies to those companies that need to comply with Financial Reporting Standards in Malaysia and not Private Entities Reporting Standards. For those companies that need to comply with Private Entities Reporting Standards, investment in associates and/or jointly controlled entities are stated in the separate financial statements of the investor at cost or revalued amount.