+971 557 188 763
Connect Us
Post By: admin July 20 2020

Everything You Need to Know About the Audit Report

Nowadays opinions matter a lot, one such opinion in a statement is an Audit report. An audit report is the end product of the audit process, a mode of communication on the output results of the audit work. It acts as the written opinion of the auditor relating to the company’s financial statements. It certifies the cash position and accounting records of a firm are true and fair based. The auditor reports to the shareholders of the company. He has to give his opinion on the reality and fairness of monetary statements. Thus, the auditor protects shareholders interest through an audit report.

Audit Report Types

The audit report is also of the subsequent types:

  1. Clean or Unqualified report: The report given by the auditor if the auditor is satisfied that the accounts, record, Profit and Loss Account and income statement do represent a real and truthful read with the accounting principles and statutory necessities. Unqualified denotes the chances of errors in the statements.
  2. Qualified Report: In a qualified report, the auditor believes that finalization of financial statements isn't fairly expressed. 
  3. Adverse or Negative Report: When there's ample basis for the auditor to create an opinion that the accounts and financial statements do not provide a true and fair view of the condition and results of operation, the adverse or negative opinion are given.
  4. Disclaimer Report: The auditor could disclaim or refuse opinion on the accounts, Profit and Loss Account and also the record, once he doesn't have ample data to base his opinion. Within the scope and opinion paragraph, the auditor ought to offer disclaimer data. This could happen on subsequent grounds.

Contents Of Audit Report

1. Title of the report: The title of the audit report ought to facilitate the reader to spot the report. It ought to disclose the name of the shopper. The title distinguishes the audit report from alternative reports.

2. Name of the recipient: The recipient unremarkably refers to the one that appoints the auditor. If a corporation appoints the auditor, the recipient ought to be shareholders. As per law, the entire address of the recipient is needed. The recipient for the statutory audit shall be shareholders and just in case of the special audit, it's the central government.

3. Introductory Paragraph: The introductory paragraph ought to specify that it's the auditor’s opinion on money statements audited by him. The amount lined by money statements ought to be declared with actual dates.

4. Scope: This half ought to embrace the matter-of-fact regarding the way within which the audit examination was created. The audit examination ought to cowl the company’s accounts, Profit and Loss Account, record and income Statements. The examination ought to be as per the relevant law. The auditor shouldn't curtail or limit any examination task.

5. Opinion: The auditor’s opinion on the books of account and money statements examined by him relies on the data and free from bias. The auditor has got to provide his opinion as follows:

  • Whether or not the money statements are arithmetically correct and correspond to the figures recorded within the books of accounts.
  • Just in case of unqualified opinion, whether or not the money statements represent a real and honest read of the state of affairs and therefore the results of operations.
  • Just in case of qualified opinion, if the record and profit and loss account don't give a real and honest read, the explanations for what and wherever is wrong.

6. Signature: The signature half ought to embrace the manual signature of the auditor. The personal name and signature of the auditor ought to be. If the auditor could be a firm, the signature within the personal name and firm name ought to be.

7. Place of Signature: This should embrace the situation of the auditor or the auditor firm that is unremarkably their town.

8. Date of the Report: The date of completion of the audit work ought to be mentioned during this section.

The Auditor’s Report Shall Conjointly State

1. Whether or not he/she has sought-after and obtained all information, the data and explanations that to the most effective of his knowledge and belief were necessary for the aim of his audit and if not, the small print hence and also the result of such data on the money statements.

2. Whether, in his opinion, correct books of account pro re nata by law are unbroken by the corporate to this point as seems from his examination of these books and correct returns adequate for the needs of his audit are received from branches not visited by him.

3. Whether or not the report on the accounts of any branch workplace of the corporate audited by someone apart from the company’s auditor has been sent to him and also the manner during which he has restricted it in making ready his report.

4. Whether or not the company’s record and profit and loss account is restricted within the report area unit in agreement with the books of account and returns.

5. Whether, in his opinion, the money statement accommodates the accounting standards.

6. The observations or comments of the auditors on money transactions or matters that have any adverse result on the functioning of the company.

7. Whether or not any director is disqualified from being appointed as a director any qualification, reservation or adverse remark concerning the upkeep of accounts and alternative matters connected therewith.

8. Whether or not the corporate has an adequate internal money system in situ and also the in-operation effectiveness of such controls.

9. Such alternative matters as is also prescribed.

Why choose CDA?

CDA is a squadron of accomplished, capable and certified auditors who are proficient in auditing. Our expert auditors provide consistent and unflustered solutions for the benefit and advancement of your company. CDA audit services in Dubai are tailor-made to meet the requirements of the clients and to comply with the audit laws. We provide legitimate conclusions to your business that help to keep a better position in the competing market. 

Also read, How to Choose the Right Auditor for Your Business

CDA has good experience in a wide portfolio of industries. Our multi-tasked team who are working as CFOs for different MNCs will help internally for the decision making as well. CDA also provides Business strategy & CFO services, Accounting Services, Auditing & Assurance Services, Vat & Tax Consultant Services. If you need any help with auditing service in Dubai, feel good to contact us. Our expert auditor will call you back immediately and will offer you a one-hour free consultation.