ICAI answers Additional FAQs for Auditor’s Opinion on Financial Statements [Read FAQs]

The Institute of Chartered Accountants of India (ICAI) has released an addendum to its FAQs providing detailed clarifications on the newly introduced “Auditor’s Opinion on Financial Statements” functionality in the UDIN (Unique Document Identification Number) portal. The clarifications come amid heightened concern from practitioners about the last-minute compliance changes introduced just days before the October 31 tax audit deadline.

According to the Addendum on FAQs for Auditor’s Opinion, the field is mandatory only for two categories-“GST & Tax Audit” and “Audit & Assurance Functions.” For these categories, members are now required to declare whether the auditor’s opinion applies to the specific audit and, if so, specify the type of opinion (Unmodified, Qualified, Adverse, or Disclaimer), along with disclosure on Key Audit Matters (KAMs), Emphasis of Matter (EOM), Other Matter, and Material Uncertainty related to Going Concern.

The ICAI clarified that the new functionality is meant to standardize reporting consistency in audit opinions and improve data integrity in financial reporting. For cases where the opinion is not applicable-such as concurrent, stock, revenue, internal, valuation, or system audits-members can select “No,” and no further input is required.

The FAQs also explain what constitutes a “modified opinion” under SA 705 (Revised), detailing the three types-Qualified, Adverse, and Disclaimer-depending on the nature and pervasiveness of misstatements or audit limitations. It also reiterates that auditors must form their opinion in line with SA 700 (Revised), which governs forming and expressing an opinion on financial statements.

Importantly, ICAI clarified that for tax audits under Section 44AB of the Income Tax Act, 1961, the auditor’s opinion on financial statements is required under Clause 3(b) of Form 3CB, and therefore, members must fill in the new opinion field when generating UDINs. However, this requirement does not apply to Form 3CA reports, which do not require such an opinion on financial statements.

The addendum further distinguishes cases involving reporting on audit trails and internal financial controls under Section 143(3)(i), noting that modifications in these areas do not necessarily affect the main audit opinion and therefore need not be reported under the new UDIN functionality.

For audits governed under state laws such as the Maharashtra Charitable Trust Act, ICAI confirmed that the auditor must express an opinion on financial statements, and thus the new field applies.

ICAI aims to help members comply smoothly with the revised UDIN framework, which links audit metadata-such as opinion type and entity classification-with document authentication.

Access the full set of additional FAQs released by ICAI by clicking the Blue Button below.

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