An entity may prepare financial statements summarizing its annual audited financial statements for the purpose of informing user group interested in the highlights only of the entity’s financial position and the result of its operations. Unless the auditor has expressed an audit opinion on the financial statements from which the summarized financial statements were derived, the auditor should not report on summarized financial statements.

Summarized financial statements are presented in considerably less detail than annual audited financial statements. Therefore, such financial statements need to clearly indicate the summarized nature of the information and caution the reader that for a better understanding of an entity’s financial position and the results of its operations, summarized financial statements are to be read in conjunction with the entity’s mist recent audited financial statements which include all disclosures required by the relevant financial reporting framework

Summarized financial statements need to be appropriate titled to identify the audited financial statements from which they have been derived, for example, ‘Summarised Financial Information prepared from the Audited Financial Statements for the Year Ended December 31, 20x1

Summarised financial statements do not contain all the information required by the financial reporting framework used for the annual audited financial statements. Consequently, wording such as ‘true and fair’ or ‘present fairly’ in all material respects’ is not used by the auditor when expressing an opinion on summarized financial statements.

The auditor’s report on summarized financial statement should include the following basic elements ordinarily in the following layout:

1. Title

2. Addressee

3. An identification of the audited financial statements from which the summarized financial statements were derived

4. A reference to the date of the audit report on the unabridged financial statements and the type of opinion given in that report

5. An opinion as to whether the information in the summarized financial statements is consistent with the audited financial statements from which it was derived. When the auditor ahs issued a modified opinion on the unabridged financial statements yet is satisfied with the presentation of the summarized financial statements , the audit report should state that although consistent with the unabridged financial statements, the summarized financial statements were derived from financial statements on which a modified audit report was issued.

6. A statement, or reference to the note within the summarized financial statements, which indicates that for a better understanding of an entity’s financial performance and position and of scope of the audit performed, the summarized financial statements should be read in conjunction with the unabridged financial statements and the audit report thereon.

7. Date of the report

8. Auditor’s address, and

9. Auditor’s signature

Examples of Reports on Summarised Financial Statements

When an Unqualified Opinion was Expressed on the Annual Audited Financial Statements

When a Qualified Opinion was Expressed on the Annual Audited Financial Statements