An audit report is an appraisal of a small business’s complete financial status. The preparation of an audit report is the last work of audit. An auditor presents weakness, strength, and details of an organization by preparing an audit report. Those including financial statements, management accounts, management reports. or others report like compliant reports. This report accumulates all the facts of the audit. So, it is proof of conducting audit properly.
An audit is related to the examination of books of accounts on the basis of regularity, rationality, economy, and efficiency. For example, auditors perform their audit on the client’s financial statements against the accounting standard that used to prepare those financial statements. An auditor checks the books of accounts on the basis of evidential documents. So, a financial statement is prepared by the auditor on the basis of information collected from the examination of evidential documents and records. This report is used by many stakeholders including entity’s management, the board of director, shareholders, investors, government body, banks, and many others. An auditor should prepare a report incorporating the facts found during the course of audit which is known as an audit report.
There are four types of audit reports: and unqualified opinion, a qualified opinion, an adverse opinion, and a disclaimer of opinion.
The audit report is an important document in which the auditor sets forth the scope and nature of the audit and also gives his impartial opinion regarding the client’s financial statement. It is the last outcome of every audit. Auditors will always have to take various judgemental assumptions, which will result in the audit opinion. We can find a vast difference in the reports which were prepared previously and the reports prepared nowadays because the responsibility of an auditor is increased highly. This is a general process for companies it uses while evaluating their records and providing financial info to present as well as future investors. So, an auditor should prepare a report considering the following facts:
- The address should be made to the authority that has appointed him.
- The auditor should express his opinion in connection to financial statements.
- The auditor should prepare a report based on the facts found after the examination of all the books of accounts.
- Date must be written in a report which shows the duration of the audit.
- The audit report may clean, qualified and adverse.
- All the facts incorporated in the report should be concise, clear and correct.