Scribd
Upload
96 views9 pages

Audit Report - SYBCOM A, Group 1

The document discusses various types of audit reports including disclaimer reports, unmodified opinions, adverse opinions, and qualified reports. It explains the objectives and components of an audit report, as well as the different situations that could lead an auditor to issue a disclaimer, unmodified opinion, adverse opinion, or qualified report. The key purpose of an audit report is for an independent auditor to provide their opinion on whether a company's financial statements fairly represent its financial position and comply with accounting standards.

Uploaded by

Nainil Acharya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
96 views9 pages

Audit Report - SYBCOM A, Group 1

The document discusses various types of audit reports including disclaimer reports, unmodified opinions, adverse opinions, and qualified reports. It explains the objectives and components of an audit report, as well as the different situations that could lead an auditor to issue a disclaimer, unmodified opinion, adverse opinion, or qualified report. The key purpose of an audit report is for an independent auditor to provide their opinion on whether a company's financial statements fairly represent its financial position and comply with accounting standards.

Uploaded by

Nainil Acharya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 9

INTERNAL PROJECT

SYBCOM SEMESTER IV

SUBJECT : AUDITING

MAIN TOPIC : AUDIT REPORT


Disclaimer Report

The auditor may disclaim or refuse opinion on the accounts. Profit and Loss
Account and the Balance Sheet, when he does not have sufficient
information to base his opinion. This may happen on the following grounds:
● The auditor has not been able to obtain sufficient information to form
his opinion,
● The audit examination is not adequate to form an opinion.
● There are some material un-determined item in audit examination.
OBJECTIVES OF AUDIT REPORT

1) To Examine the Accuracy of the Books of Accounts


2) To Express Opinion on Financial Statements
3) Detection and Prevention of Errors.
4) Detection and Prevention of Frauds.
5) To check and verify authenticity of financial documents
6) To give a true and fair view of financial statements
7) To check under and over value of assets and liabilities of a company
INTRODUCTION TO AUDIT REPORT

● The auditing of the accounts of a company is usually done by an independent


external auditor.
● An audit report is a letter from the auditor of a company that is the end result of
the audit process.
● It states the auditor’s opinion on whether the company’s financial statements such
as the balance sheet are in compliance with the generally accepted accounting
principles (GAAP) and if they are free from material misstatement.
● The audit report is generally accompanied by the company’s annual report
UNMODIFIED OPINION
When expressing an unmodified opinion on financial statements, the auditor's opinion shall, unless otherwise
required by law or regulation, use one of the following phrases, which are regarded as being equivalent:

(a) In our opinion, the accompanying financial statements present fairly, in all material respects, [...] in accordance
with [the applicable financial reporting framework]; or

(b) In our opinion, the accompanying financial statements give a true and fair view of [...] in accordance with [the
applicable financial reporting framework].

The phrases "present fairly, in all material respects," and "give a true and fair view" are regarded as being
equivalent

When the auditor expresses an unmodified opinion, it is not appropriate to use phrases such as "with the foregoing
explanation" or "subject to" in relation to the opinion, as these suggest a conditional opinion or a weakening or
modification of opinion.
ADVERSE OPINION ON AUDIT REPORT

An adverse opinion is a professional opinion made by an auditor


indicating that a company's financial statements are misrepresented,
misstated, and do not accurately reflect its financial performance and
health.. Adverse opinions are usually given after an auditors report, which
can be internal or independent of the company.There are quantifiable
effects of receiving an adverse opinion, but there are also effects like
losing consumer confidence or business arrangements that can damage
the business as well.
UNQUALIFIED OPINION- CLEAN REPORT
An unqualified opinion is an independent auditor's judgment that a company's financial
statements are fairly and appropriately presented, without any identified exceptions, and in
compliance with generally accepted accounting principles (GAAP). An unqualified opinion
is essentially a clean report. It indicates the auditor is satisfied with the company's financial
reporting. It is the type of opinion most companies expect to receive from an independent
auditor and reassures investors in the company that the financial information they have been
given is presented in an accurate and fair manner. It is issued when the auditor believes that
all changes, accounting policies, and their application and effects, have accurately been
disclosed.
QUALIFIED REPORT
Definition:
When the auditor determines there is no evidence of fraud or error, they create a report known as a qualified
audit report. However, the Generally Accepted Accounting Principles (GAAP) will not be applied to the
company's financial statements. It is comparable to an audit report with no qualifications.
In the qualified audit report, there is a qualified audit opinion expressed by auditors and states the
reason why the qualified opinion is expressed.
Such a report is also known as clean opinion or unqualified opinion. In contrast to this, a qualified report is
reported by an auditor if a certain misinterpretation or illegality is found in the company's financial statements.
Features :
❏Clarity Explanation Placement Subject to
❏Nature of qualification Breach of law Quantification Draft report
COMPONENTS OF AN AUDIT REPORT
A typical audit report has the following contents. Let us look at a brief understanding of each heading in
the audit report.

1.Title
2.Addressee
3.The Responsibility of the Auditor and the Management of the Company.
4.The Scope of the Audit
5.The Opinion of the Auditor
6.Basis of Opinion
7.Signature of Auditor
8.Place of Signature
9.Date of the Audit Report
10.
Date of Signature

You might also like