Skip to main content

Elements of audit report

1. Title of the report

The title of the audit report should help the reader to identify the report. It should disclose the name of the client. The title distinguishes the audit report from other reports.

2. Name of the Addressee

The addressee normally refers to the person who appoints the auditor. If a company appoints the auditor, the addressee should be shareholders. As per law, the complete address of the addressee is required. Addressee for the statutory audit shall be shareholders and in case of Special Audit, it is Central Government.

3. Introductory Paragraph

The introductory paragraph should specify that it is the auditor’s opinion on financial statements audited by him. The period covered by financial statements should be stated with exact dates.

4. Scope

This part should include the matter-of-fact relating to the manner in which the audit examination was made. The audit examination should cover the company's accounts, Profit and Loss Account, Balance Sheet and Cash Flow Statements. The examination should be as per the relevant law. The auditor should not curtail or limit any examination task.

5. Opinion

The auditor’s opinion on the books of account and financial statements examined by him is based on the information and free from bias. The auditor has to give his opinion as follows:

  • Whether the financial statements are arithmetically correct and correspond to the figures recorded in the books of accounts.
  • In case of unqualified opinion, whether the financial statements represent a true and fair view of the state of affairs and the results of operations.
  • In case of qualified opinion, if the Balance Sheet and Profit and Loss account do not present a true and fair view, the reasons for what and where is wrong.
Labels:

Comments

Post a Comment

Popular posts from this blog

Financial statements & analysis

  Financial statements & analysis Financial statements are written records that convey the business activities and the financial performance of a company.  The financial statements are used by investors, market analysts, and creditors to evaluate a company's financial health and earnings potential. The three major financial statement reports are the  Balance sheet Income statement Cash flow statement Financial statements are often audited by government agencies, accountants, firms, etc. to ensure accuracy and for tax, financing, or investing purposes. Sources of financial information To effectively evaluate the financial performance of the business requires financial information from three sources: a balance sheet, an income statement and a cash flow statement.  Balance Sheet   A balance sheet is a statement of assets, liabilities, and capital of a business or an organization at a particular point in time, detailing the balance of income and expenditure ov...
Post a Comment
Read more

Difference between Vouching , Verification and Valuation

  Difference between Vouching , Verification and Valuation  Vouching Verification Valuation Meaning Vouching is a process of comparing the entries in the books of accounts with the bonafide vouchers Verification is a process which proves the existence, ownership and title to the assets Valuation is a process which certifies the correct value of the assets and liabilities at the date of balance sheet. Subject Matter Vouching is made of the entries recorded in the books of original entry and their posting in the ledger Verification on the other hand is made of assets and liabilities appearing in the balance sheet at the end of the year Valuation is also made of assets and liabilities appearing in the balance sheet at the end of the year By whom Vouching is done by the senior auditor and audit clerks. Verification on the other hand is done by the auditor himself or his associates Verification on the other hand is done by the auditor himself or his associates When Vouching is done...
Post a Comment
Read more