Question

Post a response to the questions it needs to be answer in 150 words

1.What significant information is included in the auditor’s report?

2. What crucial information to completely understanding the financial statements could be included in the notes to the financial statements?

Answer 1

1) The auditor report is the report prepared by the auditor on his own where they tend to share their own opinion about the validity and realibility of the financial reports audited by them. As per the general guidelines the auditors report to include:

• The name and address of the company they have audited.
• The financial year of audit
• A summary of the auditors responisbility and their report.
• The financial statements they have audited like Balance Sheet, Profit and Loss statement and Cash Flow Statements.
• Their overall conclusion about the realibility of the financial statements.
• Any information regarding anything specifically which needs to be brought to the notice of the shareholders.
• The date and place where the audit report was signed.
• Signature of the auditor.

2) The financial statements are usually supported by the notes to the financial statements. These notes help for a better understanding of the finanical statements. They geneally contain:

• Explainantions and schedules to the balance sheet and profit and loss statements.
• Proper bifurcation of each head of the financial statements.
• Notes which cannot be monetised or wrritten in form of monetary units are often explained in the notes.
• The accounting policy of the company.
• The major deviations or assumptions taken into consideration while framing the financial statements.
• Explainations or calculations to various provisions or reserves made.
• Contingent liabbilities if any.