AUDIT REPORT &

CERTIFICATION
Presented by :
Shakeela Naz
Alishba Ahsan
Definition of Audit Report

• A report is a statement of collected and considered facts.

• “A report is a medium of expressing an opinion to persons concerned in
order to give a clear and summarized information based on collected facts
and figures” ( Joseph Lancaster)
• A report is a statement of opinion regarding an event or series of events.
• An audit report is the document through which the auditor conveys his
opinion about the fairness of the financial statements.
• The auditor submits his report to his client giving clear and concise
information of the result of audit performed by him.
• The fact or information contained in the auditor’s report is not available
from any other source
• Auditor’s report is the end product of his audit work.

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 Value of Audit Report

• The auditor’s report is of great value not only to the members of the
company, i.e. the shareholders
• Those persons who are interested in the affairs of the business, i.e.
investors,
• creditors
• employees
• government
• financial institutions
• , these groups of people are all outsiders

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Good Audit Report Essentials

• The essentials of good audit report are as follows:

• Simplicity, Accepted principles
• Clarity, Disclosure principles
• Brevity, Objectivity
• Firmness, Relevance
• Consistency

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 Scope of Audit Report

• Emphasize the importance of determining the areas to be covered during the audit process.
• Financial Statements
• Internal Controls
• Compliance
• Audit Assertions
• Documentation and Evidence
• Risk Assessment
• Management Representations

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Companies
(Auditor
Report) 2003

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Matters to be included in auditor’s report:

• Re: Fixed assets

• Re: Stock-in-trade
• Re: Loan obtained/granted
• Re: Adequacy of internal control
• Re: Special transactions
• Re: Acceptance of deposits
• Re: Internal audit system
• Re: Maintenance of cost record
• Re: Public issue
• Re: Fraud

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Form of Audit
Report

Title
Address
Identification of financial statement
Signature
Address of the auditor
Dating of the report

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Audit Report And Audit Certificate
Audit Report
• A report is a statement of opinion regarding an event
or series of events.
• auditor’s certificate confirms the correctness of the
statements prepared by the client.
Audit Certificate
• The term ‘certificate’ is used to mean confirmation of
the truth and correctness of something after a
verification of certain exact facts.
• Auditor’s certificate confirms the correctness of the
statements prepared by the client.
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Types of Audit Report

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Clean Report

• A clean report means the auditors found no

issues with the company’s financial reports,
and the company is in full compliance with
GAAP guidelines.
• This kind of report shows the auditors are
satisfied with the company’s financial
performance guidelines.
• In the report document, an auditor
expresses their belief that the company has
a good financial standing and complies with
the laws and governing principles of
accounting. Most investors want a
company to earn a clean audit report
before they invest in the business.

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Unqualified Report
• An unqualified audit report, often
referred to as a "clean" report, is
issued by auditors when they have
thoroughly examined a company's
financial statements and found them
to be in accordance with the
applicable accounting standards.
• In essence, it signifies that the
financial statements present a true
and fair view of the company's
financial position and performance.

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Qualified Report

• If the company’s financial reporting

doesn’t comply with the GAAP
guidelines
• Companies use qualified reports to
identify areas that need fixing so they
can improve their financial status.
• Auditors may issue this report if there
are certain business transactions or
practices of which they are unsure.

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Adverse Report
• An adverse report typically refers to a
document or communication that
conveys negative or unfavorable
information about a particular subject.
• It could be used in various contexts,
such as financial reports, medical
findings, or product safety
assessments.
• An adverse report highlights potential
fraud in the company and alerts
investors and other business entities
to avoid it. On the other hand, the
report offers the company an
opportunity to improve its practices
and address the underlying issues.

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Types of Audit Certificate

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Certificate for Tax Computation

• A certificate for tax computation is a document that provides detailed information about the calculation of taxes
owed by an individual or business.
• It typically includes details about income, deductions, credits, and other factors that impact the final tax liability.
• This certificate is often required for various purposes, such as obtaining loans, proving income for certain
financial transactions, or fulfilling regulatory requirements. It serves as a summary of the taxpayer's financial
details relevant to tax obligations.

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Certificate of Import and Export

• A Certificate of Import and Export is a document issued by relevant authorities or agencies in a country,
affirming that a particular business or entity has the authorization to engage in importing or exporting goods.
• This certificate is often required to ensure compliance with regulations and to monitor international trade
activities.

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Certificate of Circulation

• A Certificate of Circulation typically refers to a document issued by a publisher or distributor to verify the
number of copies of a publication that were printed and circulated.
• It is often used in the context of newspapers or magazines to provide transparency about their distribution
numbers to advertisers and stakeholders.

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Auditor Report and True and Fair View

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True and Fair View

• A "true and fair view" in a company auditor report means the financial information is presented
accurately and transparently, following accounting standards, and giving stakeholders a reliable
picture of the company's financial health.
• A requirement in an auditor's report that the set of accounts or financial statements are true, in
that there are no falsehoods, and fair, in that the result accurately reports the condition it wishes
to portray.

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Specimen of Clean Audit Report

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THANK YOU!