Auditor's report

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  • 1.  WHAT IS AUDITOR’S REPORT?  IMPORTANCE OF AUDITOR’S REPORT.  BASIC ELEMENT OF AUDITOR’S REPORT.  CONTENTS OF AUDITOR’S REPORT.  TYPES OF AUDITOR’S REPORT.  TYPES OF QUALIFICATIONS.  PRESENTATION OF AUDIT REPORT.
  • 2. An auditor’s report is a formal result of all the effort that goes into an audit. It presents the result of the examinations done by the auditor.
  • 3. One of the reports on which the shareholders depend for forming their opinion about the management is the auditor’s report. Audit report helps to maintain high standard of integrity in the company affairs.
  • 4.  Title  Addressee  Opening or introductory paragraph  Identification of financial statements audited  Date and period covered  Statements of responsibility:
  • 5.  Scope paragraph:  Opinion paragraph:  Date of completion of audit  Auditor’s address  Auditor’s signature  Firm and / or personal name of auditor.
  • 6.  First Clause Whether or not in their opinion proper books of accounts as required by the Ordinance have been kept by the Company.
  • 7.  Second Clause Whether or not in their opinion;  the balance sheet and porfit and loss account or the income and expenditures accounts have been drawn up in conformity with the ordinance and are in agrrement with the book of accounts  the expenditure incurred during the year was for the purpose of the company  the business conducted, investments made and expenditure incurred during the year were in accordance with the objects of the company.
  • 8.  Third clause Whether or not in their opinion and to the best of their information and according to the explanations given to them, the balance sheet, profit and loss account and cash flow statement conform with the approved accounting standards as applicable in Pakistan and give the information required by the Company Ordinance, 1984, in the manner so required and respectively give a true and fair view of the state of the company as at (Date)
  • 9.  Fourth Clause Whether or not in their opinion Zakat deductible at source under the Zakat Ushr Ordinance, 1980, was deducted by the company and deposited in the Central Zakat Fund established under section 7 of the Ordinance.
  • 10.  Unqualified Audit Report This type of report is issued by an auditor when the financial statements presented are free of material misstatements and are in accordance with GAAP, and the auditor does not detect any significant internal control breakdown during his examination.
  • 11.  Qualified Audit Report This type of opinion is very similar to an unqualified or "clean opinion", but the report states that the financial statements are fairly presented with a certain exception which is otherwise misstated.
  • 12.  Disclaimer of opinion The auditor is unable to give an opinion whether the financial statements are true and fair.  Adverse Opinion The auditor expresses his views of financial statements to be untrue.
  • 13.  Subject to Opinion The auditor disclaims his opinion on a particular aspect of financial statements.  Except opinion The auditor expresses adverse opinion on a particular aspect of financial statements.
  • 14.  An audit report is always included in the annual report of the company.  It should be brief, preferably of one page.  Along with an auditor’s report, the balance sheet, cash flow statement, statement of change in equity and the loss and profit account of the audited period is annexed.
  • 15.  Notes to the financial statements enable the reader of the report to understand the significant information of the financial statements.  The language of the report should be understandable by its readers.  It should contain constructive advise or healthy criticism instead of an unsupportive tone.