Which item is NOT covered by the audit opinion?

• A. Directors' report.
• B. Balance sheet.
• C. Profit and loss account.
• D. Notes to accounts.

Answer: (A)

The audit opinion is issued on the financial statements as a whole. Those statements typically include the balance sheet, the profit and loss account (income statement), and the notes to accounts, which provide the detailed disclosures and accounting policies. The directors’ report, while often part of the annual report and related to governance and management commentary, is not the thing the auditor provides an opinion on. The auditor’s opinion focuses on whether the financial statements give a true and fair view (or present fairly, etc.) and are properly prepared under the relevant accounting framework, not on the directors’ report itself. So, the item not covered by the audit opinion is the directors’ report.