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.

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