Drafting of Audit Reports

 

Drafting of Audit Reports

Audit Reports

—The auditor's report is a written letter from the auditor containing the opinion of whether a company's financial statements comply with generally accepted accounting principles (GAAP). The independent and external audit report is typically published with the company's annual report.

—The typical audit report contains three paragraphs, which cover the following topics:

◦The responsibilities of the auditor and the management of the entity.

◦The scope of the audit.

◦The auditor's opinion of the entity's financial statements.

Form or Content of Audit Report
Title of the report

It should disclose the name of the client.

2. Name of the Addressee

          The addressee normally refers to the person who appoints the auditor

3. Introductory Paragraph

             the auditor’s opinion on financial statements audited.

4. Scope

             The audit examination should cover company’s accounts, Profit and Loss Account, Balance Sheet and Cash Flow statements.

5. Opinion

           The auditor’s opinion on the books of account and financial statements examined

6. Signature

             The signature part should include the manual signature of the auditor. 

7. Place of Signature

            This should include the location of the auditor or the auditor firm, which is ordinarily their city.

8. Date of the Report

           The date of completion of the audit work should be mentioned in this section.

Types of Audit Report

—Clean or Unqualified Report

      ◦the auditor is satisfied about true and fair financial report prepared

—Qualified Report

    ◦overall financial statements are not fairly stated due to some errors 

—Adverse or Negative Report

    ◦Non conformity with  GAAP

—Disclaimer Report

     ◦Auditor has not been able to obtain sufficient information