An Audit Report is a document that is prepared by a qualified public accountant for a company or firm. It can be a small, medium, or large sized company. The Audit Report is also sometimes known as an auditor’s report. That is because it is prepared and verified by an auditor. The report showcases the transactions that have taken place in a company for a specific period.
In this article, we will try and find out what an Audit Report is, what are the sections of the report, what are report ratings, and uses of the report.
What is an Audit Report?
So, what is an Audit Report? The report contains information about the financial transactions that have taken place for the company over a period of time. It could be for a year, few years, or even a decade. The report is prepared and verified by a certified accountant who gives his or her opinions about the information that has been provided in the Audit Report.
Usually the accountant has a team of professionals who scan through the information that has been given in the report. They go through each and every statement that has been provided in the report. The report can be based on an individual or a company. You can say that the financial statements have gone through and it is ensured that there are no discrepancies in them.
Here is preview of a free Financial Audit Report Template created using MS Word,
What are Audit Report ratings? The accountant who goes through the report usually gives ratings for it. Based on what they have gone through and found out, ratings of one to four are provided. When the report has an unqualified rating, it means that the Audit Report is clean. It means that the report has no issues and the financial statements that have been provided are alright.
If the report has a qualified rating, then it means there are certain issues, but there is nothing to be alarmed. The rating doesn’t mean that the individual or company in question has done something wrong or illegal. If it has been rated as adverse opinion report, then the Audit Report had many irregularities.
The report can be taken as proper as it has not been in accordance to the laws of the land. The fourth rating is a disclaimer of opinion report, which means the report consists of many issues and it cannot be considered proper at all. The accountant should not provide a rating for the Audit Report as it is unethical.
Sections of an Audit Report
The Audit Report contains many sections. The report should come in a certain format. Each of the reports comes in a certain format that has to be followed no matter where you are from. It is important that you ensure report is written in the appropriate format. An introduction paragraph highlights the aim of the report.
The scope paragraph tells about the process which has been followed. The last paragraph is the personal opinion of the auditor about why he or she gave the ratings. For the disclaimer of opinion report, the accountant explains the reason for which the ratings could not be given. The format has to be followed for any Audit Report.
In conclusion, an Audit Report is a must for any company or firm that has been registered within a country. It is safe to have financial statements of your transactions.
Here is download link for above shown free Financial Audit Report template,