SA 705, "Modifications to the Opinion in the Independent Auditor's Report,” deals with circumstances in which the auditor is required to modify the…

Standard on Auditing (SA) 705 “Modifications to the Opinion in the Independent Auditor’s Report” deals with the auditor’s responsibility to issue an appropriate report in circumstances when, in forming an opinion in accordance with SA 700 (Revised) “Forming an Opinion and Reporting on Financial Statements”, the auditor concludes that a modification to the auditor’s opinion on the financial statements is necessary. This SA also deals with how the form and content of the auditor’s report is affected when the auditor expresses a modified opinion. The objective of the auditor is to express clearly an appropriately modified opinion on the financial statements that is necessary when: (i) The auditor concludes, based on the audit evidence obtained, that the financial statements as a whole are not free from material misstatement; or (ii) The auditor is unable to obtain sufficient appropriate audit evidence to conclude that the financial statements as a whole are not free from material misstatement.