AUDIT REPORT [ AUDITING ]

This presentation explains about the meaning as well as various types of audit report which an auditor has present in his books of accounts for the sake of the company's shareholders and various other groups.

1. Types of audit report

2. Audit report It is basically a report prepared by the auditor after examining the accounts of a company. The audit report is the report that contains the audit’s opinion which is issued by independent auditors after their examination on the entity’s financial statements and related reports. Those including financial statements, management accounts, management reports. or others report like compliant reports.

3. Users of audit report Investors use audit reports and audited financial statements to assess the entity’s financial performance and financial position for their investment opportunity. The Government Agency uses the audit reports and financial statements to assess the completeness and accuracy of the tax declaration. Shareholders and the Board of Directors use the audit report to assess the integrity of management and transparency of financial statements.

4. Types of audit report

5. CLEAN AUDIT REPORT Where the Balance Sheet of a company gives a true and fair view of the state of affairs of the company. Profit and Loss Account gives a true and fair view of the profit and loss of the company. Where no defect or discrepancy has been found by the auditor during examination of accounts, the auditor gives a clean (unqualified) report. A clean audit report implies that the management team has high integrity to the shareholders.

6. Specimen of clean reort

7. Qualified AUDIT REPORT During the course of auditing the books of account, the auditor requires several explanations in regard to the transactions of a company. Whenever the auditor is not satisfied with any explanation or information furnished to him, he must mention the fact in his report. Such a report is called a “Qualified Report”. For example, the opening balance of the entity contains a large number of inventories that could not verify. In this case, the auditor issue a qualified audit opinion on the qualified audit report. However, if the auditor thinks that the misstatement is pervasive, they will issue the adverse opinion in their report.

8. Specimen of qualified report

9. adverse AUDIT REPORT Adverse Audit Report is a type of audit report issued to the financial statements when auditors found that there are material misstatements in the financial statements. The misstatements found here are different from the material misstatements found in qualified audit reports. They are not only material misstated for themselves but also affect others accounts and items in the whole financial statements. These are called pervasive. That means all the items and accounts in the whole financial statements could not be trusted by shareholders, investors, and other stakeholders.

10. Specimen of adverse report

11. disclaimer AUDIT REPORT The disclaimer audit report is the report that issues the financial statements where there is matter to auditor’s independence and those matter cause auditors not be able to obtain sufficient audit evidence to support their opinion. This has happened when auditors are prevented to access to certain information related to items or accounts in financial statements while those items or accounts are believed to be materially misstated and pervasive.