Question

3- Identify and explain the difference between the Audit Committee Report and independent Auditors Report from annual report of Al Marai. What is the basic information discussed in these two reports? What do you think which report provides reliable information to stakeholders? from report of 2019

Answer 1

Audit Committee Report and Independent Auditor's Report

Audit Committee Report is given by members of audit committee who are the directors of the company. This report contains companies financial reporting process, compliances with laws and regulation, information on internal control sysytem and audit process. Audit committee ensures that all the issues discussed in Independent auditor's report are being addressed.

Independent auditor's report is prepared by external auditor who is appointed by audit committee. This report is a formal opinion of auditor whether company's financial statements are true and fair, comply with GAAP. They make sure that users of financial statements get correct information about the company. This report is published with company's annual report to let users know of any misstatements found.

Since external auditor is more independent in providing report on the company when compared to audit committee members, the independent auditor's report is more reliable and informative for the stakeholders of the company. Therefore it is also mandatory for some companies and public companies to conduct audit every year so that users of the financial statements are given true and fair view of the company with audited financial statements.