Question

Part A - Discussion on the audit report

The audit report is the key product of the auditing and assurance process. Using an essay format, discuss the values, issues, and future of the audit report. You are required to cite at least three readings, and two of them must be academic articles from the literature (use the Google Scholar or UoN’s library/database). The textbooks such as Moroney, et al. (2017) do not qualify as an article. APA 6^th is required with an appropriate reference list.

Answer 1

Audit report is defined as "a statement of the auditor's findings fromthe books of accounts and financial statements of the client's business to give clear and concise information to the interested parties".

It is a statement submitted by the auditor to his client which contain his opinions relating to the state of affairs of business unit of his client.

Features

1. Clarity
2. Simplicity
3. Brevity
4. Objectivity
5. Firmness
6. Relevance
7. Accepted principles

Elements

1. Title
2. Address
3. Name of client organisation
4. Identification of financial statement
5. Reference to auditing standards and practicals
6. Opinion on financial statements
7. Signature
8. Address of the auditor
9. Date
10. Place

Contents

1. Whether or not, he has obtained all the information and explanation necessary for the purpose of audit
2. Whether in his opinion, the profit and loss account exhibits a true and fair view of profit or loss for the financial year
3. Whether in his opinion the balance sheet exhibits atrue and fair view of the state of affairs of the company
4. Whether proper books of accounts as required by law have been kept by the company and proper returns for the purpose of his audit have been received from branches
5. Whether or not, the balance sheet and profit and loss account have been drawn up according to the requirements of the Companies Act

If the auditor is not satisfied with regard to any point or if he could not get any information or explanation that, in his opinion, was necessary for his audit,he should mantion the fact in his report.

Types

1. Clean report
2. Qualified report
3. Adverse report
4. Piecemeal report
5. Disclaimer of opinion

Difference between Report and Certificate

Audit report	Audit certificate
It is merely an expression of the auditor's opinion on the financial statements of a business	It is the declaration of a statement given by a person
It is based on facts,estimates and assumptions	It is based onlyon facts
It is not a guarantee of the absolute correctness and accuracy of financial statements	It is a guarantee of the absolute correctness and accuracy of financial statements
If an audit report is wrong, the auditor cannot be held responsible, as he has given merely his opinion	If a duly signed certificate by an auditor is wrong, the auditor will be responsible