Advanced audit
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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
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Audit Report Definition Guide
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.”
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3.
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
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
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16.
17.
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.