Question

What is the importance of the Auditors Report? Please discuss in detail the structure of the auditors report

Answer 1

Auditor Report

Auditor report is a statement of observation gathered and considered while proving conclusive evidence of Company's Financial Position. It is a medium through which an auditor expresses his opinion on the Financial statement under audit. It is an important part of audit as it provides the result of the audit conducted by the auditor.

Importance of Auditor report

(1)	An auditor report is the end product of the auditing and is very important and conducting part of the audit process
(2)	Auditor report reflects the work done by the auditor.
(3)	Auditor report gives the auditor's opinion on the account and record of the company, as examined by him.
(4)	Auditor report is the instrument which measures the auditor's responsibility in regard to the true and fairness of the financial statement of the company.
(5)	Auditor report shows the real position of the financial status of the company and which is used by the different people as a reliable document.

Structure of the auditor's report:

Title	The Auditor report should have an appropriate title i.e "Auditor Report" It should be distinguished from other report such as reports of officers of the entity, Board of directors.
Addressee	The Auditor report should be appropriately addressed as required by the circumstances of the engagement and applicable laws and regulations. Ordinary, the Author report is addressed to the authority appointing the Auditor.
Opening Paragraph	Auditor report should identify the financial statement of the entity that have been audited, including the date and period. Report should include a statement that the financial statements are the responsibility of the entity's management and the responsibility of the auditor is to express an opinion on the financial statement based on audit.
Scope Paragraph	The Auditor report should describe the scope of the audit by stating that the audit was conducted in accordance with auditing standard and GAAP. The report should include a statement by the auditor that the audit provides a reasonable basis for his opinion.
Opinion Paragraph	It should state the Auditor's opinion as to whether the financial statements give a true and fair view in accordance with the financial reporting framework and comply with the statutory requirements.
Date of the Report	The date of an auditor's report is the date on which the auditor signs the report expressing an opinion on the financial statement.
Place of signature	The report should name the specific location, which is ordinarily the city where the audit report is signed.
Auditor's signature	The report should be signed by the auditor in his personal name. Where a firm is appointed as the auditor, the report should be signed in the personal name of the auditor and in the name of audit firm.

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