2018/19 independent auditor's reports (local government) - 
Technical guidance note 2019/5(LG)
Prepared for appointed auditors in the local government sector
11 April 2019
1	Introduction
Purpose of technical guidance note
1.	The purpose of this technical guidance note from Audit Scotland's Professional Support is to provide external auditors appointed by the Accounts Commission with model independent auditor's reports for the 2018/19 annual accounts of local government bodies.

2.	Section 101(4) of the Local Government (Scotland) Act 1973 (the 1973 Act) requires auditors to place a certificate on a local government body's annual accounts and for that certificate to be in the form prescribed by the Accounts Commission. Appointed auditors are required by the Code of audit practice to prepare their independent auditor's reports (i.e. the certificate) in accordance with this technical guidance note:
Extract from the code of audit practice
Independent auditor’s report
94. The independent auditor’s report must set out the results of the appointed auditor’s work on the financial statements in accordance with the Technical Guidance Note on model independent auditor’s reports that is prepared annually by Audit Scotland.
3.	The model independent auditor's reports set out at Appendices 1 to 5 of this technical guidance note comply with ISA (UK) 700 Forming an opinion and reporting on financial statements. The models are consistent with illustrative examples issued by the Financial Reporting Council but tailored to reflect local government sector legislation and augmented by the reporting requirements of the Accounts Commission.
4.	Auditors should complete for each report the checklist at Appendix 6 which provides a list of the key auditor actions set out in this technical guidance note.
Contact point 
5.	The contact point in Audit Scotland's Professional Support for this technical guidance note is Paul O’Brien (pobrien@audit-scotland.gov.uk or 0131 625 1795).

Audit Scotland makes no representation that legal guidance is correct. Points of law can ultimately be decided only by the Courts. Audit Scotland accepts no responsibility for any loss or damage caused as a result of any person relying upon anything contained in this note.

2	Overview
Changes in 2018/19
6.	The model independent auditor's reports for 2018/19 have been changed to:
·	reflect the additional wording that ISA (UK) 700 requires for public interest entities
·	highlight that risks of material misstatement and conclusions on wider scope responsibilities are reported in the annual audit report
·	clarify that the Code of audit practice requires compliance with international standards on auditing
·	move the 'Bannerman' paragraph to the end of the report.
Summary of model reports
Auditors should use the correct model report that applies to the circumstances of the audited body.	
7.	The model independent auditor's reports set out in the appendices, and the annual accounts to which they apply, are summarised in the following table:

Appendix	Applicable accounts	
1	The annual accounts of councils constituted under section 2 of the Local Government (Scotland) Act 1994 (except Aberdeen City Council) where group financial statements are prepared 	
2	The annual accounts of Aberdeen City Council (which is a public interest entity)	
3	The annual accounts of (i) councils constituted under section 2 of the 1994 Act where group financial statements are not prepared and (ii) bodies to which section 106(1a) of the 1973 Act applies (e.g. valuation joint boards, joint committees, regional transport partnerships and integration joint boards)	
4	The annual accounts of local government pension scheme pension funds administered by councils	
5A	The statement of accounts of registered charities that fall under section 106(1b) of the 1973 Act prepared on an accrued basis	
5B	The statement of accounts of registered charities that fall under section 106(1b) of the 1973 Act prepared on a receipts and payments basis	
Structure of model reports
8.	The structure of the model reports, and guidance on each part, are summarised in the following table:

Part of model reports	Guidance	
Title	ISA (UK) 700 requires the auditor's report to have a title that clearly indicates that it is the report of an independent auditor.
The title 'independent auditor's report' should be used as this complies with that requirement and also clearly distinguishes it from other required reports, such as the annual audit report. 	
Addressees	ISA (UK) 700 also requires the independent auditor's report to be addressed based on the circumstances of the audit appointment.
The independent auditor's report should therefore be addressed to elected members (or trustees) and the Accounts Commission.	
Report on the audit of the financial statements	This part of the report includes the opinion on the financial statements. It also has paragraphs on:
·	the basis for that opinion
·	conclusions relating to the going concern basis of accounting
·	risks of material misstatement (new for 2018/19)
·	responsibilities of the Section 95 proper officer (or trustees), body and auditors for the financial statements
·	other information in the annual accounts.
Guidance is provided in section 3 of this technical guidance note.	
Report on other requirements - opinions on matters prescribed by the Accounts Commission 	This part sets out the opinions on the remuneration report, management commentary (or trustees' annual report) and annual governance statement.
Guidance is provided in section 4 of this technical guidance note.	
Report on other requirements - matters reported by exception	This part sets out the conclusions on matters reported by exception, such as the adequacy of accounting records.
Guidance is provided in section 5 of this technical guidance note.	
Use of report	The model reports contain a paragraph to recognise the case of Royal Bank of Scotland v Bannerman Johnstone Maclay, which highlighted potential exposure where auditors have not expressly disclaimed responsibility to third parties. For 2018/19, the location of this paragraph has moved to the end of the model report.	
Changes to model wording
Auditors should follow the wording in the relevant model other than where changes are required:
·	to reflect local circumstances
·	due to the modification to an opinion or conclusion.	
9.	Where there are no modifications to any opinion or conclusion, the wording in the relevant model should generally be used unchanged, other than to reflect local circumstances.
10.	Permitted or required changes to the relevant model are summarised in the following table:

Reason for change	Change to model wording	
Tailoring to local circumstances	Where text is in [square brackets], auditors should insert the:
·	name of the body, pension fund or charity, i.e. what it calls itself in the annual accounts (see the following table for cases where more than one fund or charity is covered)
·	precise titles used by the body for the financial statements (explained further in section 3)
·	job title of the section 95 proper officer as used in the statement of responsibilities (e.g. Director of Finance).
Auditors may also have to make amendments to the titles of the management commentary (or trustees' annual report), remuneration report, annual governance statement, and statement of responsibilities to reflect the precise titles used by the body.
Where a body does not have any significant trading operations, the reference to prescribed financial objective may be removed.	
To reflect whether appointed auditor is an individual or firm	Where the appointment lead is a member of Audit Scotland staff, the reports should be presented in the first person singular (e.g. 'I am').
Firms should present the report in the first person plural (e.g. 'We are').	
Modifying an opinion or conclusion	Guidance on modifying an opinion or conclusion is provided in sections 3 to 5 of this technical guidance note.
However, auditors are required to discuss a proposed modified opinion or conclusion, or the inclusion of 'emphasis of matter' or 'other matter' paragraphs (explained at section 6), with Professional Support in advance of finalising the report.	
Other amendments	If auditors consider that any other amendments are required to reflect local circumstances, they should contact Professional Support.	
11.	The following table explains the tailoring required when an independent auditor's report covers more than one pension fund or charity:

Position	Change to model wording	
More than one pension fund	List the name of each pension fund in the first two references.
Replace subsequent references to 'fund' in the model wording with 'funds'.	
More than one charity - connected charities provision used	Insert the collective name for all the charities covered in the first two references.
Replace subsequent references to 'charity' in the model wording with 'charities'.  	
More than one charity - connected charities provisions not used	Either:
·	List the name of each charity in the document in the first two references; and 
·	Replace subsequent references to 'charity' in the model wording with 'charities': or
Prepare a separate report for each charity in the same document.  	
Signing and dating
12.	ISA (UK) 700 requires independent auditor's reports to be signed and dated, and name the location of where the auditor practices:

Auditors should: 
·	sign and date the report on or after the authorised for issue date
·	sign the report for and on behalf of the firm (firms only)
·	give the full date and postal address
·	satisfy themselves that the report is appropriately positioned within the document.	
Signing
13.	The appointment lead should sign the independent auditor's report as follows:

Appointed auditor	Guidance on signing	
Director of Audit Services	The appointment lead (i.e. individual delegated by the Director of Audit Services) should sign the report in their own personal name.	
Firm	The appointment lead (i.e. the partner or other individual who is responsible for issuing the report) should sign the report 'for and on behalf of the firm' in their own personal name.
The individual should not sign themselves as 'senior statutory auditor' as that is a Companies Act requirement that has not been applied to local government audits.	
Dating
14.	The date given in the independent auditor's report should be the date on which the appointment lead actually signs the report. The appointment lead should aim to sign the report on the date the annual accounts are signed by the Section 95 proper officer/trustees (i.e. the authorised for issue date). Auditors should ensure they give the correct day, month and year of their signature, e.g. 30 September 2019.
15.	There may be circumstances where the appointment lead cannot sign the report on the authorised for issue date. Where that is the case, auditors should note the following:
·	The appointment lead should not sign the report earlier than the authorised for issue date.
·	Where the appointment lead signs the report on a date later than the authorised for issue date, auditors should: 
-	obtain assurance that those charged with governance would have approved the financial statements on that later date (e.g. by obtaining confirmation from the Section 95 proper officer)
-	ensure that audit procedures for reviewing subsequent events cover the period up to that later date.
Address
16.	Auditors should state in the independent auditor's report the full postal address of their office.
Positioning of the independent auditor's report
17.	Although there is no specific requirement regarding the positioning of the independent auditor's report, Professional Support considers it to be good practice for it to appear either immediately before or after the financial statements.
18.	Auditors are encouraged to discuss this matter with the body and satisfy themselves that their report is positioned within the document so that it is given appropriate, but not undue, prominence. 

3	Report on the audit of the financial statements
Opinion on financial statements 
Auditors' responsibilities
19.	Auditors are required to express an opinion on whether the financial statements:
·	give a true and fair view of the state of the affairs of the body (and its group) as at 31 March 2019 and of the income and expenditure for the year then ended;
·	have been properly prepared in accordance with the financial reporting framework.
20.	Guidance on the risks of misstatement in the financial statements is provided in technical guidance note 2018/10(LG).
Names of financial statements
Auditors should list the financial statements they have audited, using the precise titles used by the body.	
21.	Auditors are required by ISA (UK) 700 to identify the title of each statement that comprises the financial statements. Regulation 8(2) of The Local Authority Accounts (Scotland) Regulations 2014 (the accounts regulations) requires the annual accounts of local government bodies to include the financial statements required by proper practices, i.e. the Code of practice on local authority accounting in the UK (the accounting code). Charities legislation sets out the required financial statements for charities.
22.	The financial statements listed in Appendices 1 to 4 are based on the requirements of, and titles used by, the 2018/19 accounting code (and charities legislation for Appendix 5).
23.	In the event that a body uses different titles or includes other statements, auditors should amend the titles of the statements so they precisely match the statements and titles actually used. For example, some bodies present information on their trust funds and their expenditure and funding analysis as separate financial statements. Where this is the case, auditors should include them in the list of statements they have audited. Where a body includes the expenditure funding analysis or information on trust funds as a note, auditors should not specifically refer to them in their report as they are covered by the general reference to 'notes'.
24.	In previous years, there were a number of instances where the titles used by auditors or the statements listed did not precisely match those used by the body, which makes it difficult for a user of the accounts to clearly understand the statements that have been audited.
Modified opinion on financial statements
When auditors are considering modifying their opinion on the financial statements, they should discuss the proposed modified opinion with Professional Support. 
If auditors conclude that a modified opinion is appropriate, they should:
·	amend the headings and wording in the opinion and basis of opinion paragraphs
·	include a description of the matter giving rise to the modification.	
25.	ISA 705 (UK) Modifications to the opinion in the independent auditor's report establishes three types of modified opinions, i.e. a qualified opinion, an adverse opinion, and a disclaimer of opinion.
26.	There are two forms of qualified opinion. The following table summarises the circumstances in which each form would be appropriate, and the changes which auditors should make to the models in each case:  

Type of qualified opinion	Appropriate when 	Changes to models	
Material misstatement	Auditors conclude that misstatements are material (but not pervasive) to the financial statements
	Amend the heading 'Opinion on financial statements' to 'Qualified opinion on financial statements' 
Amend the heading 'Basis for opinion' to 'Basis for qualified opinion' 
Add 'qualified' before 'opinion' in the last sentence in the paragraph under the 'Basis for qualified opinion' heading 
Add a new paragraph under the 'Basis for qualified opinion' heading giving a description of the matter giving rise to the qualification
State in the 'Qualified opinion on financial statements' paragraph that, except for the effects of the matter described in the 'Basis for qualified opinion' paragraph, the financial statements give a true and fair view

Type of qualified opinion	Appropriate when 	Changes to models	
Inability to obtain evidence	Auditors are unable to obtain sufficient appropriate audit evidence on which to base the opinion, but conclude that the possible effects on the financial statements of undetected misstatements could be material but not pervasive	The changes are the same as for a 'material misstatement' qualified opinion, with the following additions
·	Add 'possible' before 'effects' in the statement added to the 'Qualified opinion on financial statements' paragraph 
·	Include in the 'Basis for qualified opinion' paragraph the reasons for the inability to obtain sufficient appropriate audit evidence
	
27.	Where there is a material misstatement, the description of the matter in the 'Basis for qualified opinion' paragraph should include: 
·	either a quantification of the financial effects of the misstatement or a statement that quantification is impracticable (where it relates to specific amounts in the financial statements)
·	where it relates to narrative disclosures in the notes, an explanation of how they are misstated
·	where it relates to the non-disclosure of required information, the nature of the omitted information and, unless impracticable, the omitted disclosures.
28.	The other types of modified opinion are when auditors:
·	conclude that material misstatements have a pervasive effect on the financial statements (adverse opinion)
·	are unable to obtain sufficient appropriate audit evidence on which to base the opinion, and they conclude that the possible effects on the financial statements of undetected misstatements could be both material and pervasive (disclaimer opinion).
29.	Pervasive effects are those that:
·	are not confined to specific items
·	represent a substantial proportion of the financial statements; or
·	are fundamental to users' understanding.
30.	These types of modified opinion are therefore extremely rare and auditors should refer to ISA (UK) 705 for the changes required to the models.
Additional public interest entity wording
Auditors should:
·	add the date of their appointment/delegation letter and the total period of appointment 
·	report any non-audit services not disclosed elsewhere	
31.	ISA (UK) 700 contains additional reporting requirements for public interest entities (PIE) in respect of information on audit appointment, non-audit services and the ability of the audit to detect irregularities including fraud. Although Aberdeen City Council is the only body that meets the legislative definition for a PIE, the information is of interest to users of the report and therefore all the model reports for 2018/19 (except charities) have been amended to reflect these additional requirements.
32.	Where the appointed auditor is a member of Audit Scotland staff, there is a slight wording difference from the firms to reflect arrangements where the Director of Audit Services is appointed as auditor but responsibility for signing the independent auditor's report is delegated to another member of staff.
33.	Where indicated in the basis of opinion paragraph, auditors should:
·	add the date of their appointment (or delegation) letter and the total period of appointment including any reappointments where indicated in the basis of opinion paragraph
·	report any non-audit services which were provided to the body that have not been disclosed elsewhere in the annual accounts.
34.	A paragraph has been added to the 2018/19 models that explains the extent to which the audit is considered capable of detecting irregularities, including fraud.
Conclusions relating to going concern basis of accounting
Auditors' responsibilities
35.	ISA (UK) 700 requires auditors to report in accordance with ISA (UK) 570 in respect of going concern. ISA (UK) 570 requires auditors to conclude: 
·	on the appropriateness of the body's use of the going concern basis of accounting
·	whether a material uncertainty exists about the body's ability to continue to adopt the going concern basis of accounting.

Matter to be reported
When auditors are considering whether there may be a going concern matter to report, auditors should: 
·	refer to practice note 10
·	discuss the matter with Professional Support.	
36.	While a local government body may face financial sustainability issues, it is highly unlikely that there will be a material uncertainty regarding the use of the going concern basis of accounting or that it would not be considered appropriate. In assessing whether this may be the case, auditors should refer to the guidance on applying ISA (UK) 570 in practice note 10.
37.	A going concern matter is more likely to arise in respect of a charity. In the rare event of a going concern matter requiring to be reported, instead of the model wording the auditor's reporting options are summarised in the following table:

Matter to be reported	Reporting	
Going concern basis of accounting inappropriate	Adverse opinion on financial statements	
Material uncertainty exists and adequately disclosed	No modification to opinion
Add separate section to the independent auditor's report under the heading 'Material uncertainty related to going concern' and draw attention to the disclosure	
Material uncertainty exists but not adequately disclosed	Qualified or possibly adverse opinion on financial statements	
Other information in the annual accounts
Auditors' responsibilities
38.	ISA (UK) 700 requires auditors to report in accordance with ISA (UK) 720 in respect of other information in the annual accounts. This relates to information other than the financial statements and audited part of the remuneration report. 
39.	Auditors should assess whether there are any material misstatements in the other information in accordance with the guidance provided in module 10 of technical guidance note 2018/10(LG). 

Material misstatement to report
When auditors are considering whether there is a material misstatement in the other information, they should discuss the matter with Professional Support.
If auditors conclude that there is an uncorrected material misstatement in the other information, they should include a statement in the independent auditor's report either describing the misstatement or referring to a basis for qualified opinion paragraph.	
40.	Where auditors conclude that there is an uncorrected material misstatement in the other information, the reporting requirement involves including a statement in the section of the independent auditor's report on other information that:
·	describes the material misstatement; or
·	if the misstatement impacts on the opinions given on the management commentary (or trustees' annual report) or annual governance statement, refers to a basis for qualified opinion paragraph in the section on matters prescribed by the Accounts Commission that describes the material misstatement (guidance on this is provided in section 4).  

4	Opinion on matters prescribed by Accounts Commission 
Auditors' responsibilities
41.	Auditors are required by the Accounts Commission to express opinions (i.e. provide positive assurance) within their independent auditor's report on whether:
·	the audited part of remuneration report has been properly prepared
·	the management commentary (or trustees' annual report) and annual governance statement are consistent with the financial statements and have been properly prepared. 
42.	Guidance on these opinions is provided in module 10 of technical guidance note 2018/10(LG).
Qualified opinion on prescribed matter
When auditors are considering qualifying their opinion on any prescribed matter, they should discuss the proposed qualified opinion with Professional Support.
If auditors conclude that a qualified opinion is appropriate, auditors should:
·	amend the heading and wording of the opinion paragraph
·	add a basis for qualified opinion paragraph 
·	provide a description of the matter giving rise to the qualified opinion.	
43.	Where auditors express a qualified opinion on any of the prescribed matters, they should:
·	amend the heading 'Opinion on matters prescribed by the Accounts Commission' to 'Qualified opinion on matters prescribed by the Accounts Commission'
·	add the phrase 'Except for the matter described in the basis for qualified opinion on matters prescribed by the Accounts Commission' section of [my/our] report'
·	add a section under the heading 'Basis for qualified opinion on matters prescribed by the Accounts Commission ' and provide a concise description of the matter giving rise to the qualification.
44.	Local government bodies are not required to report compliance with the UK Corporate governance code. If a body makes a reference in the annual governance statement to that code, auditors should contact Professional Support as this would trigger additional reporting requirements under ISAs (UK) 701 and 720. 

5	Matters reported on by exception
Auditors' responsibilities
45.	Where auditors are required to report on certain matters but positive assurance is not required, ISA (UK) 700 treats them as matters reported by exception. Auditors are required to describe their responsibilities for such matters, and incorporate a suitable conclusion (rather than opinion).
46.	The Accounts Commission requires auditors of local government bodies to report by exception if:
·	adequate accounting records have not been kept
·	the financial statements or the audited part of the remuneration report are not in agreement with the accounting records
·	they have not received all the information and explanations required for the audit
·	there has been a failure to achieve a prescribed financial objective.
Accounting records
47.	Accounting records are the records of initial accounting entries and supporting records, such as checks and records of electronic fund transfers; invoices; contracts; the general and subsidiary ledgers, journal entries and other adjustments to the financial statements that are not reflected in formal journal entries; and records such as work sheets and spreadsheets supporting cost allocations, computations, reconciliations and disclosures.
48.	The accounting records should comprise an orderly, classified collection of information capable of timely retrieval, containing details of the transactions, assets and liabilities of the body. The information should be organised so as to enable a trial balance to be constructed. Auditors should consider accounting records to be adequate if they are sufficient to: 
·	show and explain the transactions of the body
·	disclose with reasonable accuracy, at any time, the financial position of the body
·	enable the Section 95 proper officer to ensure that any accounts required to be prepared comply with statutory requirements.
49.	There is a distinction between the accounting records and the accounting control system. If auditors find weaknesses relating to the accounting control system rather than the accounting records, they can still conclude that adequate accounting records have been kept. The weaknesses in the accounting control systems, where significant, would be reported in the governance statement.
Failure to achieve a prescribed financial objective
50.	Auditors are required by the Accounts Commission to report a local government body's failure to achieve a prescribed financial objective.
51.	The only prescribed financial objective relates to the requirement for a significant trading operation to break even over a three-year period. Auditors are therefore required to report any failure of a significant trading operation to break even over the three-year period 2016/17 to 2018/19 in their independent auditor's report as a failure to achieve a prescribed financial objective. Module 9 (section 10) of Technical guidance note 2018/10(LG) provides guidance for auditors. 
52.	Where a body does not have any significant trading operations, the reference in the model independent auditor's report may be removed.
Modified conclusion
When auditors are considering modifying their conclusion on any matter reported by exception, they should discuss the proposed modified conclusion with Professional Support.
Where a modified conclusion is appropriate, auditors should: 
·	amend the conclusion wording in the model reports
·	provide a description of the matter giving rise to the modification.	
53.	Where auditors conclude that a modified conclusion is appropriate, they should:
·	modify the conclusion to 'I/We have the following to report in respect of these matters'  
·	provide a concise description of the matter being reported
·	finish with the sentence 'I/We have nothing to report in respect of the other matters'.
54.	Where auditors express a modified conclusion in respect of a matter reported by exception, this may also give rise to a modification of the auditor’s opinion on the financial statements, e.g. if adequate accounting records have not been maintained and as a result it proves impracticable for the auditor to obtain sufficient appropriate evidence concerning material matters in the financial statements.

6	Emphasis of matter/other matter paragraphs
Auditors' responsibilities
55.	ISA (UK) 706 Emphasis of matter paragraphs and other matter paragraphs in the independent auditor's report deals with 'emphasis of matter' and 'other matter' paragraphs in the independent auditor’s report. These may need to be added to the model reports when auditors consider it necessary to draw users’ attention to matters that are either fundamental to understanding the financial statements or relevant to understanding the audit.
Matter to be reported
When auditors are considering whether it is necessary to draw attention to certain matters under ISA (UK) 706, they should discuss the matter with Professional Support.
If auditors conclude that such matters require attention to be drawn, they should include an 'emphasise of matter' or 'other matter' paragraph.	
56.	The following table summarises the requirements for an 'emphasis of matter' paragraph: 

Used to refer to a matter	Examples	Changes to model	
Appropriately presented or disclosed in the financial statements; and 
Of such importance that it is fundamental to users’ understanding of the financial statements; but
A modified opinion is not required	An uncertainty relating to the future outcome of exceptional litigation or regulatory action.
A significant subsequent event that occurs between the date of the financial statements and the date of the auditor’s report.
Early application (where permitted) of a new accounting standard that has a material effect on the financial statements.
A major catastrophe that has had, or continues to have, a significant effect on the authority's financial position.	Include the paragraph within a separate section of the independent auditor’s report with an appropriate heading that includes the term 'Emphasis of matter'.
Include in the paragraph a clear reference to the matter being emphasised and to where relevant disclosures that fully describe the matter can be found in the financial statements.
Indicate that the auditor’s opinion on the financial statements is not modified in respect of the matter emphasised.	
57.	An 'other matter' paragraph is used to refer to a matter other than those presented or disclosed in the financial statements that are relevant to users’ understanding of the audit, the auditor’s responsibilities or the auditor’s report. The use of such a paragraph in the public sector is extremely rare.

Appendix 1
Model independent auditor’s report – councils (group)
Independent auditor’s report to the members of [insert name of council) and the Accounts Commission
Report on the audit of the financial statements
Opinion on financial statements
[I/We] certify that [I/we] have audited the financial statements in the annual accounts of [insert name of council] and its group for the year ended 31 March 2019 under Part VII of the Local Government (Scotland) Act 1973. The financial statements comprise the [specify precisely the titles of the financial statements used by the council such as the group and council-only Comprehensive Income and Expenditure Statements, Movement in Reserves Statements, Balance Sheets, and Cash-Flow Statements, the council-only Housing Revenue Account Income and Expenditure Statement, the Movement on the Housing Revenue Account Statement, the Council Tax Income Account, and the Non-domestic Rate Account, and any other disclosures presented as financial statements] and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union, and as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2018/19 (the 2018/19 Code).
In [my/our] opinion the accompanying financial statements:
·	give a true and fair view in accordance with applicable law and the 2018/19 Code of the state of affairs of the council and its group as at 31 March 2019 and of the income and expenditure of the council and its group for the year then ended;
·	have been properly prepared in accordance with IFRSs as adopted by the European Union, as interpreted and adapted by the 2018/19 Code; and
·	have been prepared in accordance with the requirements of the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003. 
Basis for opinion
[I/We] conducted [my/our] audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)), as required by the Code of Audit Practice approved by the Accounts Commission for Scotland. [My/Our] responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of [my/our] report. [I was/We were] appointed [under arrangements approved (ASG only)] by the Accounts Commission on [insert date of appointment/delegation letter]. The period of total uninterrupted appointment is [insert number] years. [I am/We are] independent of the council and its group in accordance with the ethical requirements that are relevant to [my/our] audit of the financial statements in the UK including the Financial Reporting Council’s Ethical Standard, and [I/we] have fulfilled [my/our] other ethical responsibilities in accordance with these requirements. Non-audit services prohibited by the Ethical Standard were not provided to the council. [List any non-audit services not disclosed elsewhere]. [I/We] believe that the audit evidence [I/we] have obtained is sufficient and appropriate to provide a basis for [my/our] opinion.
Conclusions relating to going concern basis of accounting
[I/We] have nothing to report in respect of the following matters in relation to which the ISAs (UK) require [me/us] to report to you where:
·	the use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
·	the [insert job title of proper officer] has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the council's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
Risks of material misstatement
[I/We] have reported in a separate Annual Audit Report, which is available from the Audit Scotland website, the most significant assessed risks of material misstatement that [I/we] identified and [my/our] conclusions thereon.
Responsibilities of the [insert job title of proper officer] and [council or name of audit committee] for the financial statements
As explained more fully in the Statement of Responsibilities, the [insert job title of proper officer] is responsible for the preparation of financial statements that give a true and fair view in accordance with the financial reporting framework, and for such internal control as the [insert job title of proper officer] 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, the [insert job title of proper officer] is responsible for assessing the council'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 deemed inappropriate.
The [council/name of audit committee] is responsible for overseeing the financial reporting process.
Auditor’s responsibilities for the audit of the financial statements
[My/Our] 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/our] opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) 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 financial statements.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, intentional omissions, misrepresentations, or the override of internal control. The capability of the audit to detect fraud and other irregularities depends on factors such as the skilfulness of the perpetrator, the frequency and extent of manipulation, the degree of collusion involved, the relative size of individual amounts manipulated, and the seniority of those individuals involved. [I/We] therefore design and perform audit procedures which respond to the assessed risks of material misstatement due to fraud.
A further description of the auditor’s responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website www.frc.org.uk/auditorsresponsibilities. This description forms part of [my/our] auditor’s report.
Other information in the annual accounts
The [insert job title of proper officer] is responsible for the other information in the annual accounts. The other information comprises the information other than the financial statements, the audited part of the Remuneration Report, and [my/our] auditor’s report thereon. [My/Our] opinion on the financial statements does not cover the other information and [I/we] do not express any form of assurance conclusion thereon except on matters prescribed by the Accounts Commission to the extent explicitly stated later in this report.
In connection with [my/our] audit of the financial statements, [my/our] responsibility is to read all the other information in the annual accounts and, in doing so, consider whether the other information is materially inconsistent with the financial statements or [my/our] knowledge obtained in the audit or otherwise appears to be materially misstated. If [I/we] identify such material inconsistencies or apparent material misstatements, [I am/we are] required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work [I/we] have performed, [I/we] conclude that there is a material misstatement of this other information, [I am/we are] required to report that fact. [I/We] have nothing to report in this regard.
Report on other requirements
Opinions on matters prescribed by the Accounts Commission
In [my/our] opinion, the audited part of the Remuneration Report has been properly prepared in accordance with The Local Authority Accounts (Scotland) Regulations 2014.
In [my/our] opinion, based on the work undertaken in the course of the audit:
·	the information given in the Management Commentary for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with statutory guidance issued under the Local Government in Scotland Act 2003; and
·	the information given in the Annual Governance Statement for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the Delivering Good Governance in Local Government: Framework (2016).
Matters on which [I am/we are] required to report by exception
[I am/We are] required by the Accounts Commission to report to you if, in [my/our] opinion:
·	adequate accounting records have not been kept; or
·	the financial statements and the audited part of the Remuneration Report are not in agreement with the accounting records; or
·	[I/we] have not received all the information and explanations [I/we] require for [my/our] audit; or
·	there has been a failure to achieve a prescribed financial objective.
[I/We] have nothing to report in respect of these matters.
Conclusions on wider scope responsibilities
In addition to [my/our] responsibilities for the annual accounts, [my/our] conclusions on the wider scope responsibilities specified in the Code of Audit Practice, including those in respect of Best Value, are set out in [my/our] Annual Audit Report.
Use of [my/our] report
This report is made solely to the parties to whom it is addressed in accordance with Part VII of the Local Government (Scotland) Act 1973 and for no other purpose. In accordance with paragraph 120 of the Code of Audit Practice, [I/we] do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties.
[Signature]
[Name of appointment lead], (for and on behalf of [name of firm] - firms only)
[Full postal address]
[Full date]

Appendix 2
Model independent auditor’s report - Aberdeen City Council
Independent auditor’s report to the members of Aberdeen City Council and the Accounts Commission
Report on the audit of the financial statements
Opinion on financial statements
We certify that we have audited the financial statements in the annual accounts of Aberdeen City Council and its group for the year ended 31 March 2019 under Part VII of the Local Government (Scotland) Act 1973. The financial statements comprise the [specify precisely the titles of the financial statements used by the council such as the group and council-only Comprehensive Income and Expenditure Statements, Movement in Reserves Statements, Balance Sheets, and Cash-Flow Statements, the council-only Housing Revenue Account Income and Expenditure Statement, the Movement on the Housing Revenue Account Statement, the Council Tax Income Account, and the Non-domestic Rate Account, and any other disclosures presented as financial statements] and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union, and as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2018/19 (the 2018/19 Code).
In our opinion the accompanying financial statements:
·	give a true and fair view in accordance with applicable law and the 2018/19 Code of the state of the affairs of the council and its group as at 31 March 2019 and of the income and expenditure for the year then ended;
·	have been properly prepared in accordance with IFRSs as adopted by the European Union, as interpreted and adapted by the 2018/19 Code; and
·	have been prepared in accordance with the requirements of the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003. 
Basis for opinion
We conducted our audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)), as required by the Code of Audit Practice approved by the Accounts Commission for Scotland. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We were appointed by the Accounts Commission on 31 May 2016. The period of total uninterrupted appointment of the firm is three years. We are independent of the council and its group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK including the Financial Reporting Council’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Non-audit services prohibited by the Ethical Standard were not provided to the council. [List any non-audit services not disclosed elsewhere]. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our audit opinion is consistent with the additional report to the Audit, Risk and Scrutiny Committee.
Conclusions relating to going concern basis of accounting
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
·	the use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
·	the Director of Resources has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the council's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the audit team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
[Description of each key audit matter in accordance with ISA (UK) 701.]
Our application of materiality and overview of the scope of our audit
[Explanation of how the auditor applied the concept of materiality in planning and performing the audit. This is required to include the threshold used by the auditor as being materiality for the financial statements as a whole but may include other relevant disclosures. Overview of the scope of the audit, including an explanation of how the scope addressed each key audit matter and was influenced by the auditor’s application of materiality.]
Responsibilities of the Director of Resources and Audit, Risk and Scrutiny Committee for the financial statements
As explained more fully in the Statement of Responsibilities, the Director of Resources is responsible for the preparation of financial statements that give a true and fair view in accordance with the financial reporting framework, and for such internal control as the Director of Resources 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, the Director of Resources is responsible for assessing the council’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 deemed inappropriate.
The Audit, Risk and Scrutiny Committee is responsible for overseeing the financial reporting process.
Auditor’s responsibilities for the audit of the financial statements
Our 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 our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) 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 financial statements.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, intentional omissions, misrepresentations, or the override of internal control. The capability of the audit to detect fraud and other irregularities depends on factors such as the skilfulness of the perpetrator, the frequency and extent of manipulation, the degree of collusion involved, the relative size of individual amounts manipulated, and the seniority of those individuals involved. We therefore design and perform audit procedures which respond to the assessed risks of material misstatement due to fraud. [Insert further explanation of the extent to which the audit is capable of detecting irregularities].
A further description of the auditor’s responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Other information in the annual accounts
The Director of Resources is responsible for the other information in the annual accounts. The other information comprises the information other than the financial statements, the audited part of the Remuneration Report, and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon except on matters prescribed by the Accounts Commission to the extent explicitly stated later in this report.
In connection with our audit of the financial statements, our responsibility is to read all the other information in the annual accounts and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Report on other requirements
Opinions on matters prescribed by the Accounts Commission
In our opinion, the audited part of the Remuneration Report has been properly prepared in accordance with The Local Authority Accounts (Scotland) Regulations 2014.
In our opinion, based on the work undertaken in the course of the audit:
·	the information given in the Management Commentary for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with statutory guidance issued under the Local Government in Scotland Act 2003; and
·	the information given in the Annual Governance Statement for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the Delivering Good Governance in Local Government: Framework (2016).
Matters on which we are required to report by exception
We are required by the Accounts Commission to report to you if, in our opinion:
·	adequate accounting records have not been kept; or
·	the financial statements and the auditable part of the Remuneration Report are not in agreement with the accounting records; or
·	we have not received all the information and explanations we require for our audit
·	there has been a failure to achieve a prescribed financial objective.
We have nothing to report in respect of these matters.
Conclusions on wider scope responsibilities
In addition to our responsibilities for the annual accounts, our conclusions on the wider scope responsibilities specified in the Code of Audit Practice, including those in respect of Best Value, [are/will be] set out in our Annual Audit Report.
Use of [my/our] report
This report is made solely to the parties to whom it is addressed in accordance with Part VII of the Local Government (Scotland) Act 1973 and for no other purpose. In accordance with paragraph 120 of the Code of Audit Practice, we do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties.
[Signature], [Name of appointment lead], for and on behalf of KPMG LLP, [Full postal address], [Full date] 

Appendix 3
Model independent auditor’s report – councils (non-group) and section 106 bodies
Independent auditor’s report to the members of [insert name of council/body] and the Accounts Commission
Report on the audit of the financial statements
Opinion on financial statements
[I/We] certify that [I/we] have audited the financial statements in the annual accounts of [insert name of council/body] for the year ended 31 March 2019 under Part VII of the Local Government (Scotland) Act 1973. The financial statements comprise the [specify precisely the titles of the financial statements used by the council/body such as the Comprehensive Income and Expenditure Statement, Movement in Reserves Statement, Balance Sheet, Cash-Flow Statement, Housing Revenue Account Income and Expenditure Statement, the Movement on the Housing Revenue Account Statement, the Council Tax Income Account, and the Non-domestic Rate Account, and any other disclosures presented as financial statements] and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union, and as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2018/19 (the 2018/19 Code).
In [my/our] opinion the accompanying financial statements:
·	give a true and fair view in accordance with applicable law and the 2018/19 Code of the state of affairs of the [council/body] as at 31 March 2019 and of its income and expenditure for the year then ended;
·	have been properly prepared in accordance with IFRSs as adopted by the European Union, as interpreted and adapted by the 2018/19 Code; and
·	have been prepared in accordance with the requirements of the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003. 
Basis for opinion
[I/We] conducted [my/our] audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)), as required by the Code of Audit Practice approved by the Accounts Commission for Scotland. [My/Our] responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of [my/our] report. [I was/We were] appointed [under arrangements approved (ASG only)] by the Accounts Commission on [insert date of appointment/delegation letter]. The period of total uninterrupted appointment is [insert number] years. [I am/We are] independent of the [council/body] in accordance with the ethical requirements that are relevant to [my/our] audit of the financial statements in the UK including the Financial Reporting Council’s Ethical Standard, and [I/we] have fulfilled [my/our] other ethical responsibilities in accordance with these requirements. Non-audit services prohibited by the Ethical Standard were not provided to the [council/body]. [List any non-audit services not disclosed elsewhere]. [I/We] believe that the audit evidence [I/we] have obtained is sufficient and appropriate to provide a basis for [my/our] opinion.
Conclusions relating to going concern basis of accounting
[I/We] have nothing to report in respect of the following matters in relation to which the ISAs (UK) require [me/us] to report to you where:
·	the use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
·	the [insert job title of proper officer] has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about [the council's/body's] ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. 
Risks of material misstatement
[I/We] have reported in a separate Annual Audit Report, which is available from the Audit Scotland website, the most significant assessed risks of material misstatement that [I/we] identified and [my/our] conclusions thereon.
Responsibilities of the [insert job title of proper officer] and [council/board/name of audit committee) for the financial statements
As explained more fully in the Statement of Responsibilities, the [insert job title of proper officer] is responsible for the preparation of financial statements that give a true and fair view in accordance with the financial reporting framework, and for such internal control as the [insert job title of proper officer] 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, the [insert job title of proper officer] is responsible for assessing the [council's/body'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 deemed inappropriate.
The [council/board/name of audit committee] is responsible for overseeing the financial reporting process.

Auditor’s responsibilities for the audit of the financial statements
[My/Our] 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/our] opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) 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 financial statements.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, intentional omissions, misrepresentations, or the override of internal control. The capability of the audit to detect fraud and other irregularities depends on factors such as the skilfulness of the perpetrator, the frequency and extent of manipulation, the degree of collusion involved, the relative size of individual amounts manipulated, and the seniority of those individuals involved. [I/We] therefore design and perform audit procedures which respond to the assessed risks of material misstatement due to fraud.
A further description of the auditor’s responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website www.frc.org.uk/auditorsresponsibilities. This description forms part of [my/our] auditor’s report.
Other information in the annual accounts
The [insert job title of proper officer] is responsible for the other information in the annual accounts. The other information comprises the information other than the financial statements, the audited part of the Remuneration Report, and [my/our] auditor’s report thereon. [My/Our] opinion on the financial statements does not cover the other information and [I/we] do not express any form of assurance conclusion thereon except on matters prescribed by the Accounts Commission to the extent explicitly stated later in this report.
In connection with [my/our] audit of the financial statements, [my/our] responsibility is to read all the other information in the annual accounts and, in doing so, consider whether the other information is materially inconsistent with the financial statements or [my/our] knowledge obtained in the audit or otherwise appears to be materially misstated. If [I/we] identify such material inconsistencies or apparent material misstatements, [I am/we are] required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work [I/we] have performed, [I/we] conclude that there is a material misstatement of this other information, [I am/we are] required to report that fact. [I/We] have nothing to report in this regard.

Report on other requirements
Opinions on matters prescribed by the Accounts Commission
In [my/our] opinion, the audited part of the Remuneration Report has been properly prepared in accordance with The Local Authority Accounts (Scotland) Regulations 2014.
In [my/our] opinion, based on the work undertaken in the course of the audit:
·	the information given in the Management Commentary for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with statutory guidance issued under the Local Government in Scotland Act 2003; and
·	the information given in the Annual Governance Statement for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the Delivering Good Governance in Local Government: Framework (2016).
Matters on which [I am/we are] required to report by exception
[I am/We are] required by the Accounts Commission to report to you if, in [my/our] opinion:
·	adequate accounting records have not been kept; or
·	the financial statements and the audited part of the Remuneration Report are not in agreement with the accounting records; or
·	[I/we] have not received all the information and explanations [I/we] require for [my/our] audit[; or
·	there has been a failure to achieve a prescribed financial objective - delete if not applicable].
[I/We] have nothing to report in respect of these matters.
Conclusions on wider scope responsibilities
In addition to [my/our] responsibilities for the annual accounts, [my/our] conclusions on the wider scope responsibilities specified in the Code of Audit Practice, including those in respect of Best Value, are set out in [my/our] Annual Audit Report.
Use of [my/our] report
This report is made solely to the parties to whom it is addressed in accordance with Part VII of the Local Government (Scotland) Act 1973 and for no other purpose. In accordance with paragraph 120 of the Code of Audit Practice, [I/we] do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties.
[Signature], [Name of appointment lead], (for and on behalf of [name of firm] - firms only), [Full postal address], [Full date]

Appendix 4
Model independent auditor’s report – local government pension scheme pension funds
Independent auditor’s report to the members of [insert name of council] as administering authority for [insert name of pension fund/each pension fund] and the Accounts Commission
Report on the audit of the financial statements
Opinion on financial statements
[I/We] certify that [I/we] have audited the financial statements in the annual report of [insert name of each pension fund] (the [fund/funds]) for the year ended 31 March 2019 under Part VII of the Local Government (Scotland) Act 1973. The financial statements comprise the [specify precisely the titles of the financial statements used by the council such as the Fund Account(s), the Net Assets Statement(s)] and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union, and as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2018/19 (the 2018/19 Code).
In [my/our] opinion the accompanying financial statements:
·	give a true and fair view in accordance with applicable law and the 2018/19 Code of the financial transactions of the [fund/funds] during the year ended 31 March 2019 and of the amount and disposition at that date of [its/their] assets and liabilities;
·	have been properly prepared in accordance with IFRSs as adopted by the European Union, as interpreted and adapted by the 2018/19 Code; and
·	have been prepared in accordance with the requirements of the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003. 
Basis for opinion
[I/We] conducted [my/our] audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)) as required by the Code of Audit Practice approved by the Accounts Commission for Scotland. [My/Our] responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of [my/our] report. [I was/We were] appointed [under arrangements approved (ASG only)] by the Accounts Commission on [insert date of appointment/delegation letter]. The period of total uninterrupted appointment is [insert number] years. [I am/We are] independent of the [fund/funds] in accordance with the ethical requirements that are relevant to [my/our] audit of the financial statements in the UK including the Financial Reporting Council’s Ethical Standard, and [I/we] have fulfilled [my/our] other ethical responsibilities in accordance with these requirements. Non-audit services prohibited by the Ethical Standard were not provided to the council. [List any non-audit services not disclosed elsewhere]. [I/We] believe that the audit evidence [I/we] have obtained is sufficient and appropriate to provide a basis for [my/our] opinion.
Conclusions relating to going concern basis of accounting
[I/We] have nothing to report in respect of the following matters in relation to which the ISAs (UK) require [me/us] to report to you where:
·	the use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
·	the [insert job title of proper officer] has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about [the fund's/funds'] ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. 
Risks of material misstatement
[I/We] have reported in a separate Annual Audit Report, which is available from the Audit Scotland website, the most significant assessed risks of material misstatement that [I/we] identified and [my/our] conclusions thereon.
Responsibilities of the [insert job title of proper officer] and [council/name of committee] for the financial statements
As explained more fully in the Statement of Responsibilities, the [insert job title of proper officer] is responsible for the preparation of financial statements that give a true and fair view in accordance with the financial reporting framework, and for such internal control as the [insert job title of proper officer] 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, the [insert job title of proper officer] is responsible for assessing the [fund's/funds'] ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless deemed inappropriate.
The [council/name of committee] is responsible for overseeing the financial reporting process.
Auditor’s responsibilities for the audit of the financial statements
[My/Our] 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/our] opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) 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 financial statements.
A further description of the auditor’s responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website www.frc.org.uk/auditorsresponsibilities. This description forms part of [my/our] auditor’s report.
Other information in the annual report
The [insert job title of proper officer] is responsible for the other information in the annual report. The other information comprises the information other than the financial statements and [my/our] auditor’s report thereon. [My/Our] opinion on the financial statements does not cover the other information and [I/we] do not express any form of assurance conclusion thereon except on matters prescribed by the Accounts Commission to the extent explicitly stated later in this report.
In connection with [my/our] audit of the financial statements, [my/our] responsibility is to read all the other information in the annual report and, in doing so, consider whether the other information is materially inconsistent with the financial statements or [my/our] knowledge obtained in the audit or otherwise appears to be materially misstated. If [I/we] identify such material inconsistencies or apparent material misstatements, [I am/we are] required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work [I/we] have performed, [I/we] conclude that there is a material misstatement of this other information, [I am/we are] required to report that fact. [I/We] have nothing to report in this regard.
Report on other requirements
Opinions on matters prescribed by the Accounts Commission
In [my/our] opinion, based on the work undertaken in the course of the audit:
·	the information given in the Management Commentary for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with statutory guidance issued under the Local Government in Scotland Act 2003; 
·	the information given in the Annual Governance Statement for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the Delivering Good Governance in Local Government: Framework (2016); and 
·	the information given in the Governance Compliance Statement for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with The Local Government Pension Scheme (Scotland) Regulations 2018.

Matters on which [I am/we are] required to report by exception
[I am/We are] required by the Accounts Commission to report to you if, in [my/our] opinion:
·	adequate accounting records have not been kept; or
·	the financial statements are not in agreement with the accounting records; or
·	[I/we] have not received all the information and explanations [I/we] require for [my/our] audit.
[I/We] have nothing to report in respect of these matters.
Conclusions on wider scope responsibilities
In addition to [my/our] responsibilities for the annual accounts, [my/our] conclusions on the wider scope responsibilities specified in the Code of Audit Practice, including those in respect of Best Value, are set out in [my/our] Annual Audit Report.
Use of [my/our] report
This report is made solely to the parties to whom it is addressed in accordance with Part VII of the Local Government (Scotland) Act 1973 and for no other purpose. In accordance with paragraph 120 of the Code of Audit Practice, [I/we] do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties.
[Signature]
[Name of appointment lead], (for and on behalf of [name of firm] - firms only)
[Full postal address]
[Full date]

Appendix 5A
Model independent auditor’s report – registered section 106 charities (accrued accounts) 
Independent auditor’s report to the trustees of [insert name of charity/collective name of connected charities] and the Accounts Commission
Report on the audit of the financial statements
Opinion on financial statements
[I/We] certify that [I/we] have audited the financial statements in the statement of accounts of [insert name of charity/collective name of connected charities] for the year ended 31 March 2019 under Part VII of the Local Government (Scotland) Act 1973 and section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005. The financial statements comprise the [specify precisely the titles of the financial statements used by the council for the charity such as the Statement of Financial Activities, the Balance Sheet] and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and the United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In [my/our] opinion the accompanying financial statements:
·	give a true and fair view of the state of affairs of the [charity/charities] as at 31 March 2019 and of [its/their] incoming resources and application of resources for the year then ended;
·	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
·	have been prepared in accordance with the requirements of the Charities and Trustee Investment (Scotland) Act 2005, and regulation 8 of The Charities Accounts (Scotland) Regulations 2006. 
Basis for opinion
[I/We] conducted [my/our] audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)), as required by the Code of Audit Practice approved by the Accounts Commission for Scotland. [My/Our] responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of [my/our] report. [I am/We are] independent of the [charity/charities] in accordance with the ethical requirements that are relevant to [my/our] audit of the financial statements in the UK including the Financial Reporting Council’s Ethical Standard, and [I/we] have fulfilled [my/our] other ethical responsibilities in accordance with these requirements. [I/We] believe that the audit evidence [I/we] have obtained is sufficient and appropriate to provide a basis for [my/our] opinion.
Conclusions relating to going concern basis of accounting
[I/We] have nothing to report in respect of the following matters in relation to which the ISAs (UK) require [me/us] to report to you where:
·	the use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
·	the trustees have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about ability of the [charity/charities] to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. 
Responsibilities of the trustees for the financial statements
[As explained more fully in the Statement of Responsibilities - delete if no such statement included], the trustees are responsible for the preparation of financial statements that give a true and fair view in accordance with the financial reporting framework, and for such internal control as the trustees determine 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, the trustees are responsible for assessing the [charity's/charities'] ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless deemed inappropriate.
Auditor’s responsibilities for the audit of the financial statements
[My/Our] 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/our] opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) 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 financial statements.
A further description of the auditor’s responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website www.frc.org.uk/auditorsresponsibilities. This description forms part of [my/our] auditor’s report.
Other information in the statement of accounts
The trustees are responsible for the other information in the statement of accounts. The other information comprises the information other than the financial statements and [my/our] auditor’s report thereon. [My/Our] opinion on the financial statements does not cover the other information and [I/we] do not express any form of assurance conclusion thereon except on matters prescribed by the Accounts Commission or required by applicable law to the extent explicitly stated later in this report.
In connection with [my/our] audit of the financial statements, [my/our] responsibility is to read all the other information in the statement of accounts and, in doing so, consider whether the other information is materially inconsistent with the financial statements or [my/our] knowledge obtained in the audit or otherwise appears to be materially misstated. If [I/we] identify such material inconsistencies or apparent material misstatements, [I am/we are] required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work [I/we] have performed, [I/we] conclude that there is a material misstatement of this other information, [I am/we are] required to report that fact. [I/We] have nothing to report in this regard.
Report on other requirements
Opinion on matter prescribed by the Accounts Commission
In [my/our] opinion, based on the work undertaken in the course of the audit the information given in the Trustees' Annual Report for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the Charities SORP (FRS 102).
Matters on which [I am/we are] required to report by exception
[I am/We are] required by The Charity Accounts (Scotland) Regulations 2006 to report to you if, in [my/our] opinion:
·	proper accounting records have not been kept; or
·	the financial statements are not in agreement with the accounting records; or
·	[I/we] have not received all the information and explanations [I/we] require for [my/our] audit.
[I/We] have nothing to report in respect of these matters.
Use of [my/our] report
This report is made solely to the parties to whom it is addressed in accordance with Part VII of the Local Government (Scotland) Act 1973 and for no other purpose. In accordance with paragraph 120 of the Code of Audit Practice, [I/we] do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties.
[Signature], [Name of appointment lead], (for and on behalf of [name of firm] - firms only), [Full postal address], [Full date]
[insert name of appointment lead (Audit Scotland) or firm] is eligible to act as an auditor in terms of [insert either section 1212 of the Companies Act 2006 (for applicable firms)/Part VII of the Local Government (Scotland) Act 1973 (for Audit Scotland staff and firms where auditor is not eligible under the Companies Act)]
Appendix 5B
Model independent auditor’s report – registered section 106 charities (receipts and payments accounts) 
Independent auditor’s report to the trustees of [insert name of charity/collective name of connected charities] and the Accounts Commission
Report on the audit of the financial statements
Opinion on financial statements
[I/We] certify that [I/we] have audited the financial statements in the statement of accounts of [insert name of charity/collective name of connected charities] for the year ended 31 March 2019 under Part VII of the Local Government (Scotland) Act 1973 and section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005. The financial statements comprise the [specify precisely the titles of the financial statements used by the council for the charity such as the Statement of Receipts and Payments, the Statement of Balances] and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and a receipts and payments basis.
In [my/our] opinion the accompanying financial statements:
·	properly present the receipts and payments of the [charity/charities] for the year ended 31 March 2019 and [its/their] statement of balances at that date; and
·	have been prepared in accordance with the requirements of the Charities and Trustee Investment (Scotland) Act 2005, and regulations 9(1),(2) and (3) of The Charities Accounts (Scotland) Regulations 2006. 
Basis for opinion
[I/We] conducted [my/our] audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)), as required by the Code of Audit Practice approved by the Accounts Commission for Scotland. [My/Our] responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of [my/our] report. [I am/We are] independent of the [charity/charities] in accordance with the ethical requirements that are relevant to [my/our] audit of the financial statements in the UK including the Financial Reporting Council’s Ethical Standard, and [I/we] have fulfilled [my/our] other ethical responsibilities in accordance with these requirements. [I/We] believe that the audit evidence [I/we] have obtained is sufficient and appropriate to provide a basis for [my/our] opinion.

Responsibilities of the trustees for the financial statements
[As explained more fully in the Statement of Responsibilities - delete if no such statement included], the trustees are responsible for the preparation of financial statements which properly present the receipts and payments of the [charity/charities], and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s responsibilities for the audit of the financial statements
[My/Our] 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/our] opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) 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 financial statements.
A further description of the auditor’s responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website www.frc.org.uk/auditorsresponsibilities. This description forms part of [my/our] auditor’s report.
Other information in the statement of accounts
The trustees are responsible for the other information in the statement of accounts. The other information comprises the information other than the financial statements and [my/our] auditor’s report thereon. [My/Our] opinion on the financial statements does not cover the other information and [I/we] do not express any form of assurance conclusion thereon except on matters prescribed by the Accounts Commission or required by applicable law to the extent explicitly stated later in this report.
In connection with [my/our] audit of the financial statements, [my/our] responsibility is to read all the other information in the statement of accounts and, in doing so, consider whether the other information is materially inconsistent with the financial statements or [my/our] knowledge obtained in the audit or otherwise appears to be materially misstated. If [I/we] identify such material inconsistencies or apparent material misstatements, [I am/we are] required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work [I/we] have performed, [I/we] conclude that there is a material misstatement of this other information, [I am/we are] required to report that fact. [I/We] have nothing to report in this regard.

Report on other requirements
Opinion on matter prescribed by the Accounts Commission
In [my/our] opinion, based on the work undertaken in the course of the audit the information given in the Trustees' Annual Report for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with The Charities Accounts (Scotland) Regulations 2006.
Matters on which [I am/we are] required to report by exception
[I am/We are] required by The Charity Accounts (Scotland) Regulations 2006 to report to you if, in [my/our] opinion:
·	proper accounting records have not been kept; or
·	the financial statements are not in agreement with the accounting records; or
·	[I/we] have not received all the information and explanations [I/we] require for [my/our] audit.
[I/We] have nothing to report in respect of these matters.
Use of [my/our] report
This report is made solely to the parties to whom it is addressed in accordance with Part VII of the Local Government (Scotland) Act 1973 and for no other purpose. In accordance with paragraph 120 of the Code of Audit Practice, [I/we] do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties.
[Signature]
[Name of appointment lead], (for and on behalf of [name of firm] - firms only)
[Full postal address]
[Full date]
[insert name of appointment lead (Audit Scotland) or firm] is eligible to act as an auditor in terms of [insert either section 1212 of the Companies Act 2006 (for applicable firms)/Part VII of the Local Government (Scotland) Act 1973 (for Audit Scotland staff and firms where auditor is not eligible under the Companies Act)]

Appendix 6
Auditor action checklist
	Yes/No/N/A	Initials/date	W/P ref	
1	Have you used the correct model for the circumstances of the body?				
2	Have you named the body consistently?				
3	Have you presented the reports in the correct person (i.e. singular for Audit Scotland staff, plural for firms)? 				
4	Have you used the correct job title in all the references to the proper officer?				
5	Have you specified precisely the titles of the financial statements used by the body? 				
6	Have you amended the names of the other reports to reflect the actual titles used by the body? 				
7	Have you:
·	added the date of your appointment/delegation letter and the total period of appointment 
·	reported any non-audit services not disclosed elsewhere?				
8	Have you discussed any proposed modifications to audit opinions or conclusions, reporting of material misstatements, or emphasis of matter/other matter paragraphs, with Professional Support? 				
9	Have you discussed any other proposed amendments to the model wording with Professional Support?				
10	Have you ensured that the report has been signed:
·	by the relevant appointment lead
·	on the authorised for issue date (or as close as possible thereafter)?
·	'for and on behalf of the firm' (firms only)?

9	Does the report give the full date and postal address?				
10	Have you satisfied yourself that the independent auditors report is appropriately located within the annual accounts?