AUDITOR’S REPORT 2
KINDS OF AUDITOR’S REPORT
KINDS OF AUDITOR’S REPORT
BY SHASHI AGGARWAL
• AUDITOR’S REPORT
1. INDEPENDENT EXPRESSION OF OPINION ON THE BASIS OF VARIOUS FACTS AND EVIDENCE COLLECTED AND PRESENTED BY THE AUDITOR REGARDING FINANCIAL STATEMENTS OF THE COMPANY
2. THE AUDITOR EXPRESSES HIS OPINION WITH REASONABLE DEGREE OF SKILL AND CARE AS HE IS RESPONSIBLE FOR IT
3. AUDITOR’S REPORT IS JUST AN OPINION AND NOT A GUARANTEE ABOUT ACCURACY AND CORRECTNESS OF THE FINANCIAL STATEMENTS
4. THE AUDITOR VERIFIES THE ACCOUNTING DATA AND OTHER DOCUMENTS AND THEN HE PRESENT HIS OPINION
5. THE AUDITOR IS NOT CERTIFY THE CORRECTNESS OF FINANCIAL STATEMENTS BUT TO REPORT WHETHER THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT OF THE COMPANY PRESENT TRUE AND FAIR VIEW.
• KINDS OF AUDIT REPORT
• ON THE BASIS OF TYPE OF OPINION EXPRESSED BY THE AUDITOR,THE AUDIT REPORTS CAN BE CLASSIFIED AS FOLLOWS :
1. UNQUALIFIED OR CLEAN REPORT
2. QUALIFIED REPORT
3. AUDIT REPORT WITH AN EMPHASIS OF MATTERS PARAGRAPH
4. ADVERSE REPORT
5. DISCLAIMER OF OPINION REPORT
• UNQUALIFIED OR CLEAN REPORT
1. SATISFIED WITH FAIRNESS OF BALANCE SHEET AND PROFIT AND LOSS ACCOUNT , HE WILL GIVE A CLEAN REPORT
2. MAKES VARIOUS STATUTORY AFFIRMATIONS WITHOUT RESERVATION
3. UNQUALIFIED REPORT
4. DOES NOT MEAN THAT IS ABSOLUTELY ACCURATE IN OTHER WORDS AUDITOR IS NOT GUARANTOR OR INSURER
• QUALIFIED REPORT
1. AS PER SA 705 MODIFICATION TO THE OPINION IN THE INDEPENDENT AUDITOR’S REPORT
2. ISSUED WHEN AUDITOR EXPRESSES A QUALIFIED OPINION OR ADVERSE OPINION OR DISCLAIMER OPINION
3. WHEN HE CONCLUDES ON THE BASIS OF SUFFICIENT APPROPRIATE EVIDENCE THAT MISSTATEMENT ARE MATERIAL BUT NOT PERVASIVE TO THE FINANCIAL STATEMENTS
4. HE IS UNABLE TO OBTAIN SUFFICIENT AND APPROPRIATE EVIDENCE TO CONCLUDE THAT FINANCIAL STATEMENTS ARE FREE FROM MATERIAL MISSTATEMENTS
5. MAY BE UNDETECTED MATERIAL BUT NOT PERVASIVE
• AUDIT REPORT WITH AN EMPHASIS OF MATTER AND OTHER MATTER PARAGRAPH
• MAY PUT THESE PARAGRAPH IN HIS REPORT TO DRAW USER’S ATTENTION TO THE MATTER WHICH MAY OR MAY NOT BE DISCLOSED IN THE FINANCIAL STATEMENTS BUT ARE FUNDAMENTAL TO USER’S UNDERSTANDING OF FINANCIAL STATEMENTS
• EMPHASIS OF MATTER PARAGRAPH MAY BE IMMEDIATELY AFTER OPINION PARAGRAPH IN AUDITR’S REPORT MAKING CLEAR REFERENCE TO MATTER EMPHASIZED. THE EXAMPLE : MATERIAL CHANGES IN ACCOUNTING POLICY,CLEARLY APPLICATION OF NEW ACCOUNTING STANDARD,UNCERTAINTY OF PENDING LITIGATION
• OTHER MATTER PARAGRAPH: PLACED AFTER AUDITOR ‘S OPINION AND EMPHASIS OF MATTER PARAGRAPH. THE MATTER OTHER THAN THOSE IN THE FINANCIAL STATEMENTS BUT ARE RELEVANT TO USER’S OUTSTANDING
• LIKE : OTHER MATTER RELATING TO AUDIT CONSOLIDATED FINANCIAL STATEMENTS : AUDIT OF SUBSIDIARY COMPANY’S FINANCIAL STATEMENTS NOT AUDITED BY HIM
• ADVERSE REPORT
• MAY GIVE AN ADVERSE REPORT IN CASES THERE IS REASONABLE EVIDENCE FOR HIM TO FORM AN OPINION THAT FINANCIAL STATEMENTS TAKEN AS WHOLE DO NOT PRESENT TRUE AND FAIR VIEW OF THE FINANCIAL POSITION AND PROFIT AND LOSS OF THE COMPANY
• ALL THE MATERIAL REASONS MAY BE DISCLOSED
• WHEN AUDITOR IS DISSATISFIED WITH TRUTH AND FAIRNESS OF THE FINANCIAL STATEMENTS
• ADVERSE REPORT GROUNDS
• AS PER SA 705,THE AUDITOR SHALL EXPRESS ADVERSE OPINION WHEN HE HAS OBTAINED APPROPRIATE EVIDENCE AND CONCLUDES THAT MISSTATEMENTS ARE MATERIAL AS WELL AS PERVASIVE TO THE FINANCIAL STATEMENTS
1. SUFFICIENT EVIDENCE
2. WHEN FINANCIAL STATEMENTS DO NOT COMPLY WITH THE PROVISIONS OF COMPANIES ACT
3. BASED ON THE INFORMATION FULL OF MISTAKES AND DISCREPANCIES
4. DISSATISFIED IN MATERIAL RESPECT REGARDING DISCLOSURE IN FINANCIAL STATEMENTS
• DISCLAIMER OF OPINION REPORT
1. MAY NOT GET VARIOUS BOOKS OF ACCOUNT AND RECORDS DUE TO SAME BEING IN THE CUSTODY OF INCOME TAX DEPTT,POLICE EXCISE OR CUSTOMS ETC
2. OR IMPORTANT INFORMATION MAY NOT BE AVAILABLE DUE TO LOSS IN FIRE
3. OR REFUSAL OF MANAGEMENT TO MAKE THE RECORD AVAILABLE
4. HE MAY NOT BE IN POSITION TO GIVE HIS OPINION
5. MAY DISCLAIM OPINION BY GIVING REASONS FOR THE SAME
6. AS PER SA 705 ,THE AUDITOR SHALL DISCLAIM AN OPINION BECAUSE HE IS NOT ABLE TO OBTAIN SUFFICIENT APPROPRIATE EVIDENCE TO FORM BASIS TO HIS OPINION AND AUDITOR CONCLUDES POSSIBLE EFFECT ON FINANCIAL STATEMENT OF UNDETECTED MISSTATEMENT IF ANY COULD BE MATERIAL AS WELL AS PERVASIVE
• DIFFERENCE BETWEEN ADVERSE REPORT AND DISCLAIMER OF OPINION REPORT
• ADVERSE REPORT WHEN THERE IS REASONABLE EVIDENCE FOR HIM TO FORM AN OPINION THAT FINANCIAL STATEMENTS TAKEN AS WHOLE DO NOT REPRESENT TRUE AND FAIR VIEW OF FINANCIAL POSITION
• DISCLAIMER OF OPINION REPORT : OPINION ARISES FROM LACK OF KNOWLEDGE ON THE PART OF THE AUDITOR
No comments:
Post a Comment