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    Audit Report

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    ZUNERAKHALID
    The document defines and describes the different types of audit reports that can be issued by auditors. There are four main types: clean/unqualified report issued when financial statements present a true view; qualified report issued when issues prevent a clean opinion; disclaimer report issued when auditors cannot form an opinion due to lack of evidence; and adverse report issued when statements are materially misstated. The audit report provides the auditor's opinion on a company's financial statements after conducting the financial audit.

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    Audit Report

    Uploaded by

    ZUNERAKHALID
    51 views13 pages
    The document defines and describes the different types of audit reports that can be issued by auditors. There are four main types: clean/unqualified report issued when financial statements present a true view; qualified report issued when issues prevent a clean opinion; disclaimer report issued when auditors cannot form an opinion due to lack of evidence; and adverse report issued when statements are materially misstated. The audit report provides the auditor's opinion on a company's financial statements after conducting the financial audit.

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    The document defines and describes the different types of audit reports that can be issued by auditors. There are four main types: clean/unqualified report issued when financial statements present a true view; qualified report issued when issues prevent a clean opinion; disclaimer report issued when auditors cannot form an opinion due to lack of evidence; and adverse report issued when statements are materially misstated. The audit report provides the auditor's opinion on a company's financial statements after conducting the financial audit.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    51 views13 pages

    Audit Report

    Uploaded by

    ZUNERAKHALID
    The document defines and describes the different types of audit reports that can be issued by auditors. There are four main types: clean/unqualified report issued when financial statements present a true view; qualified report issued when issues prevent a clean opinion; disclaimer report issued when auditors cannot form an opinion due to lack of evidence; and adverse report issued when statements are materially misstated. The audit report provides the auditor's opinion on a company's financial statements after conducting the financial audit.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 13

    Audit Report

    What is Audit Report?

    • An audit report is an opinion on the financial statements of the


    Company given by the Auditors after conducting the financial audit of
    the company. The auditor’s report is the end product of each
    audit. The Auditor’s report is published with the Annual report of the
    Company.
    Important Points/Purpose

    • This is used by the investors to assess the financial performance of


    the entity as on the basis of that only they will decide whether to
    invest in that company or not.
    • It is used by the Shareholders and the board of directors for assessing
    the transparency of the financial statement and integrity of the
    management.
    Types of Audit Report

    Types of Audit Report Opinion


    Clean Report Unqualified Opinion
    Qualified Report Qualified Opinion
    Disclaimer Report Disclaimer Opinion
    Adverse Audit Report Adverse Opinion
    Clean Report/Unqualified
    • Issued for any audit where the auditor is satisfied that the financial
    statements present a true and fair view of the operations and
    transactions in an organization
    • An audit report with an Unmodified Opinion is also known as a
    ‘Unqualified Report’
    Qualified Report

    • A qualified audit opinion letter indicates that auditors found issues in


    a company’s financial information.
    • These issues prevent the auditors from issuing a clean opinion on the
    company’s operations.
    • The first qualification represents a single deviation from GAAP.
    • Another qualification is limitation of scope.
    A Basis FOR Qualified Opinion
    • The notes to the financial statements do not disclose that one of the
    company’s directors, Mr.X, controls ABC Limited, from which the
    company purchased and services during year of xxx. Such disclosure is
    required by standards.
    • We believe that the audit evidence we have obtained is sufficient and
    appropriate to provide a basis for our qualified opinion.
    Disclaimer Report

    • In case the auditor fails to frame an opinion about the financial


    statements of the company then he gives a disclaimer of opinion. The
    reason for the disclaimer can be the lack of audit evidence or the
    restriction by the client to examine all the records etc.
    Example of a Draft Disclaimer of
    Opinion
    • We were engaged to audit the financial statements of ABC Private
    Limited (“the entity”) which comprises the Balance Sheet as at March 31,
    XXXX, the statement of Profit and Loss, (the statement of changes in
    equity) and statement of Cash Flows for the year then ended, and notes
    to the financial statements, including a summary of significant
    accounting policies.
    •  We do not express an opinion on the accompanying financial statements
    of the entity. Because of the significance of the matters described in the
    Basis for Disclaimer of Opinion section of our report, we have not been
    able to obtain sufficient and appropriate audit evidence to provide a
    basis for an audit opinion on these financial statements.
    Adverse Audit Report

    • This is the worst type is the adverse opinion that an auditor can give.
    It reflect that the financial statements of an entity are materially
    misstated, misrepresented and do not reflect its correct financial
    performance.
    Example

    • In our opinion, because of the omission of the information in the


    Basis for Adverse Opinion paragraph, the financial statements do not
    give the information required by the Companies Act, 2013, in the
    manner so required and also, do not give a true and fair view in
    conformity with the accounting principles.
    Emphasis of Matter paragraph
    in an Audit Report

    • In a situation where the auditor concludes that it is important to draw


    the attention of users of the financial statement to a particular
    reported item, he/she may include an Emphasis of Matter paragraph
    in his / her audit report. In this case, the auditor is not required to
    modify his / her opinion. The paragraph is added when the issue is
    not a key audit matter and only requires disclosure for a better
    understanding of the financial statements.
    Basic Content of an Audit Report
    • Audit Report Contents are the basic structure of the audit report which needs
    to be clear, providing sufficient evidence providing the justification about the
    opinion of the auditors and includes
    • Title of Report, Addressee details,
    • Introduction
    • Responsibility of Auditor & Management
    • Scope
    • Opinion of Auditor
    • Basis of Opinion
    • Signature Place & Date

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