What are the seven parts present in an audit report?

The audit is known to be a useful part of a company’s financial status. An accountant’s opinions or findings help management to change their strategy or to handle certain matters more efficiently.

The audit also makes management aware of their financial status. There are times when companies are oblivious to their financial status, making them oblivious that they have spent more than they should.

With an auditor who knows your Financial Statements and internal controls, you have the assurance that you really have a fair and accurate representation of your company’s financial status on those papers. You can be sure that your company is economically sound.

Audit report in a nutshell

A external accountant always has to submit an audit report to the management of a company they have audited. It contains their findings and their opinion regarding the financial statements and internal controls of a company. An audit report contains the valuable information a company needs.

Read more : Checklist for Financial Audit of Construction Companies in UAE

What are the 4 types of audit reports?

The 4 types of audit reports are: unqualified point of view, Qualified advice, Disclaimer Opinion, en Negative opinion.

  1. Unqualified point of view

This is the report that states that a company’s financial statements are presented fairly and meet accounting standards.

  1. Qualified advice

This is a type of report that expresses that it cannot give an unqualified opinion for various reasons. One reason may be that the financial statements do not meet the standards for financial statements.

  1. Disclaimer Opinion

This is a type of report that auditors present when they cannot make a clear judgment on the audit because they have not had the opportunity to perform certain tasks due to lack of information or assistance on the part of management, incorrectly kept financial records, etc.

  1. Negative opinion

Such a report from an accountant is alarming because it means that there is a gross error in a company’s financial statements and possibly even fraud.

Read more : 4 types of audit reports you should know

What are the? seven parts of an auditor’s report?

The audit report template contains 7 parts of elements, namely: the title of the report, the introductory paragraph, the scope paragraph, the summary, the opinion paragraph, the name of the auditor and the signature of the auditor.

  1. Report title

This has the basic components of an audit report: the date (usually the last day an audit is held) and the addressee (the shareholders or board of directors of the audited company).

  1. Introduction paragraph

This section states that an audit is being conducted in the company mentioned above. It is also stated here which financial administration was used in the audit carried out. It also states that it is a company’s responsibility to ensure that its financial statements are accurate and fair in accordance with internationally accepted accounting standards.

  1. Scope Paragraph

This is a paragraph that basically expresses that the rules and methods followed by an auditor in the audit were determined by generally accepted auditing standards. These were essentially intended to provide companies with reasonable assurance that everything stated in their financial statements is accurate.

  1. Management summary

In this segment, the findings of an accountant are discussed. An accountant here writes down the matters that in his opinion are important for the management of a company to know. This is only the summary of what an auditor has found, not his opinion of his findings. This is simply compiled from what they reviewed in their time frame at auditing.

  1. Opinion paragraph

This is where an accountant’s judgment comes in whether he believes that a company’s financial statements are correct, fair and follow accounting standards or not. They also indicate how they arrived at such a conclusion.

  1. Accountant name

An auditor’s name is then identified after all of the above information so that it is clear that the author of the audit report is the auditor who performed the audit himself. In case an auditor works in an outside organization, the name of their firm should also be mentioned.

  1. Signature accountant

An accountant’s signature means that an accountant who writes an accountant’s report acknowledges the responsibility to which he is held accountable with regard to the results of the audit performed by him.

There are many things you should know about audit apart from its benefits. To learn more about the laws and what there is to know about the audit, you need a consultant with experience in this area.

Farahat & Co. has a team of accounting firms in Dubai and experienced advisors to surround you with the information you need.

You can discuss your audit needs or questions at any time with one of our auditors in Dubai. You can contact us and book a free consultation† We will make sure we have a team of knowledgeable people to assist you.

Read more : 6 steps to an effective financial audit