Advanced audit For downloading this contact- bikashkumar.bk100@gmail.com Prepared by Students of University of Rajshahi Md. Aminul Islam Milon Md. Maznur Rahman Md. Tarikul Islam Tarif Md. Mamunur Rahman Subho Placid Besra Rahid Hasan Bikash Kumar Md. Ali Haidar Md. Alomgir Hosen Khairul Basar Risul Islam Tonu Md. Asik Mahamud Ahsan Ullah Tanveer Shaharear Md. Imran Hossain Arif Hossain (leader) Md. Aslam Hossain Md. Faysal Alam Md. Junayed Md. Nazrul Islam Md. Rasel Mollah

1. Definition of Auditor’s Report
An audit report may be defined as an organized statement of facts relating to
audit of books of account of the company prepared after an inquiry and
presented to the shareholders.
According to Lancaster “A report is a statement of collected and
considered facts, so drawn up to give clear and concise information to
persons who are not already in possession of the full facts of the
subject matter of the report.”

4. Importance of internal users
Implementation of future plan
 Knowing true and fear information
 Declaration of dividends
 Proper management
 Government donation

5. Importance of external users
 Reflecting actual financial position
 Help to future investors
 Tax Authority
 Help to invest
 Help to take loan
 Purchase of share
 Investigation
 Critical valuation
 Accurate data expression
 Professional advancement

6. Basic elements of Audit Report
 Title
 Address
 Identification of the financial statement
 A reference to the auditing standards.
 An expression or disclaimer of opinion on the financial statements.
 Signature
 The auditors address &
 The date of the report.

7. Features of Audit Report
Simplicity
Unambiguous opinion
Clarity
Brief
Factual information
Unbiased opinion

8. Cont..
Forceful
Point out mistake
Constructive criticism
Logical suggestion
Configuration Reference
Systematic & Scientific Examinations

9. Auditors’ Responsibility
 Comply with applicable audit requirements
 Communicate and Clarity audit requirements
 Plan the audit and carry out assigned responsibilities effectively and efficiently
 Document the observations
 Report the audit result
 Verify the effectiveness of corrective actions taken as a result of the audit
 Retain and safeguard documents pertaining the audit

10. Management’s Responsibility for the
Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated
financial statements of the group and also the financial statements of the Bank in accordance
with Bangladesh Financial Reporting Standards (BFRS), Bank Companies Act 1991, the rules
and regulations issued by the Bangladesh Bank, the Companies Act 1994, the Securities and
Exchanges Rules 1987 and other applicable laws and regulations. This responsibility includes;
designing, implementing and maintaining internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to
fraud or error; selecting and applying appropriate accounting policies, and making accounting
estimates that are reasonable in the circumstances.

11. Qualified Opinion
In our opinion, except for the effects of the matters described in the Basis for Qualified
Opinion Paragraphs 1 to 2, the financial statements prepared in accordance with Bangladesh
Financial Reporting Standards (BFRS), give a true and fair view of the financial position of the
Group as well as the Bank as at 31 December 2012 and of the results of its financial
performance and its cash flows for the year then ended and comply with the Bank Companies
Act 1991, the rules and regulations issued by the Bangladesh Bank, the Companies Act 1994,
the Securities and Exchanges Rules 1987 and other applicable laws and regulations.

12. Emphasis of Matter for qualified opinion
 In addition to our above qualified opinion, we draw attention to the following facts:
 1. Note 7.9 to the financial statements stated that some loans are not classified and no
provision has been provided due to High-Court Injunction.
 2. Note 14 to the financial statements stated that there is a shortfall of capital in compliance
 with the requirements of BASEL II.
 3. Note 7.10 to the financial statements stated that Hotel Sheraton Corporate Branch and
Gulshan Corporate Branch distributed loans and advances fraudulently to some parties
contravening banking rules and regulations.

13. We also report that:
 (i) We have obtained all the information and explanations which to the best of our knowledge and
belief were necessary for the purpose of our audit and made due verification thereof;
 (ii) in our opinion, proper books of account as required by law have been kept by SBL so far as it
appeared from our examination of those books and proper returns adequate for the purpose of our
audit have been received from (1140) branches not visited by us;
 (iii) the consolidated balance sheet and consolidated profit and loss account of the Group and
those of the Bank together with the annexed notes 1 to 48 dealt with by the report are in
agreement with the books of account and returns;
 (iv) the expenditures incurred was for the purpose of the Group’s and the Bank’s business;
 (v) subject to matters described in basis for qualified opinion paragraphs and emphasis of matter
paragraph, the financial position as of 31 December 2012 and the loss for the year then ended
have been properly reflected in the financial statements and the financial statements have been
prepared in accordance with the Bangladesh Accounting Standards.

14. Classification of Audit Report
Unqualified or clean report
 Qualified report
 Adverse report &
 Disclaimer report

18. Adverse Report
When an auditor gives his opinion in a report describing
that the accuracy and the appropriate ness of the accounts
are not properly shown is called adverse report.

19. Disclaimer Report
Where there exits differences between the opinion of the auditor and
authority then the auditor reports that he is unable to take the
responsibility of audit, then it is called report with disclaimer.

20. Audit Report of Company
 According to section 213 (2), (3), & (4) the auditor’s report should contain the following
clause.
 1st clause: Whether or not they have obtained all the information & explanations which is
the best of their knowledge & belief were necessary for the purpose of the audit (sec 213).
 2nd clause :Whether or not in their opinion proper books of accounts as recquired by the act
have been kept by the company sec 213(1).
 3rd clause: Whether or not in their opinion the balancesheet & profit &loss account have
been drawn up in conformity with the act & are in agreement with the books of account.

21.  4th clause: whether or not in their opinion and to the best of their information
and according to the explanation given to them, the said accounts give the
information a recquired by the ordinance in the manner so required and give a
true and fair view.
 5th clause: whether or not in their opinion:-
1. The expenditure incurred during the year was for the purpose of a company business.
2. The business conducted, investments made & expenditure incurred during the year were in
accordance with the objects of company.

22. When to qualify an audit report:
 In adequate provision for depreciation
 In adequate provision made for bad and doubtful debts.
 Valuation of investment at cost when the market price is far below it.
 Contingent liability is not disclosed
 Violation of provisions of company law- payment of remuneration to managerial personnel
in excess of limit without approval.

23. Features of qualified audit report
Clear & unambiguous
Conciseness.
Specific & to the point
Effect of matter
Misinterpretation.