An independent auditor's report on financial statements is an effective way for auditors to communicate with investors and other key stakeholders.

It's a written document that provides an opinion on whether an entity's financial statements comply with relevant standards and legislation.

While audited financial statements have always been a vital part of maintaining integrity, building confidence and keeping stakeholders informed, in today's challenging economic climate they take on an even greater importance.

Derive greater value from auditors' reports

Written in simple language, this valuable resource takes you through the key aspects of an auditor's report and explains what the different types of opinions mean in practical terms.

COVID-19 has created significant challenges for the 2020 financial reporting and auditing season, such as physical access restrictions and substantial economic uncertainty.

To help investors and other stakeholders gain greater insights from an auditor's report in this climate, Chartered Accountants ANZ have published a useful example auditor's report and guide 'Navigating auditors' reports in a COVID-19 world'.

Written in simple language, it takes you through the key aspects of an auditor's report and explains what the different types of opinions mean in practical terms.

Navigating auditors' reports in a COVID-19 world | Read the publication

Understand the impact of COVID-19

Importantly, this valuable resource also points out what we can expect to see this year in an auditor's report and the areas you should focus on.

It predicts a sharp increase in 'Material uncertainty related to going concern', which reflects the number of entities with a questionable ability to continue trading. While this section does not 'modify' the auditor's opinion or indicate misstatements, it helps to draw the reader's attention to uncertainty in relation to the entity's future.

Other aspects to look out for are the anticipated increase in 'Key Audit Matters' relating to the extra effort by auditors to obtain the evidence required, as well as more 'Emphasis on Matter' paragraphs that reflect management's analysis of the impact of COVID-19.

'Modified opinions' could also increase due to lack of physical access to premises for stocktaking purposes.