An audit report is prepared by auditors post-examination of a company's financial statements, conveying their opinion on accuracy and completeness. There are four main types of audit reports: clean, qualified, adverse, and disclaimer, each indicating different levels of confidence regarding the financial statements. Users of these reports include investors, governmental agencies, shareholders, and boards of directors, who rely on them for assessing financial performance and integrity.

1. TYPES OF AUDIT REPORT

2. AUDIT REPORT
It is basically a report prepared by the auditor after examining
the accounts of a company.
The audit report is the report that contains the audit’s
opinion which is issued by independent auditors after their
examination on the entity’s financial statements and related
reports.
Those including financial statements, management accounts,
management reports. or others report like compliant reports.

3. USERS OF AUDIT REPORT
• Investors use audit reports and audited financial statements to assess the
entity’s financial performance and financial position for their investment
opportunity.
• The Government Agency uses the audit reports and financial statements to
assess the completeness and accuracy of the tax declaration.
• Shareholders and the Board of Directors use the audit report to assess the
integrity of management and transparency of financial statements.
Investors Government
Agency
Shareholders Board of
Directors

4. TYPES OF AUDIT REPORT
1.CLEAN AUDIT REPORT
2.QUALIFIED AUDIT REPORT
3.DISCLAIMER AUDIT REPORT
4.ADVERSE AUDIT REPORT

5. CLEAN AUDIT REPORT
Where the Balance Sheet of a company gives a true and fair view
of the state of affairs of the company.
 Profit and Loss Account gives a true and fair view of the profit
and loss of the company.
 Where no defect or discrepancy has been found by the auditor
during examination of accounts, the auditor gives a clean
(unqualified) report.
A clean audit report implies that the management team has high
integrity to the shareholders.

6. SPECIMEN OF CLEAN REORT

7. QUALIFIED AUDIT REPORT
During the course of auditing the books of account, the auditor requires
several explanations in regard to the transactions of a company.
Whenever the auditor is not satisfied with any explanation or information
furnished to him, he must mention the fact in his report. Such a report is
called a “Qualified Report”.
For example, the opening balance of the entity contains a large number of
inventories that could not verify.
In this case, the auditor issue a qualified audit opinion on the qualified audit
report. However, if the auditor thinks that the misstatement is pervasive,
they will issue the adverse opinion in their report.

8. SPECIMEN OF QUALIFIED REPORT

9. ADVERSE AUDIT REPORT
Adverse Audit Report is a type of audit report issued to the financial
statements when auditors found that there are material misstatements in
the financial statements.
The misstatements found here are different from the material misstatements
found in qualified audit reports.
They are not only material misstated for themselves but also affect others
accounts and items in the whole financial statements. These are called
pervasive.
That means all the items and accounts in the whole financial statements
could not be trusted by shareholders, investors, and other stakeholders.

10. SPECIMEN OF ADVERSE REPORT

11. DISCLAIMER AUDIT REPORT
The disclaimer audit report is the report that issues the financial
statements where there is matter to auditor’s independence and
those matter cause auditors not be able to obtain sufficient audit
evidence to support their opinion.
This has happened when auditors are prevented to access to
certain information related to items or accounts in financial
statements while those items or accounts are believed to be
materially misstated and pervasive.