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Group members: Group Name: Sacrifice No. Name Id Program 01. Md. Burhanur Rahman 09302040 BBA 02. Raihanul Islam 11202166 03. Shaon Ahmed 11202201 04. Roksana Islam 12102285 05. Khadiza Akter 10302125 06. Samima Sultana 12102486

Topic: Audit Report Contents: Basic elements of an audit report Specimen of a clean auditor’s report Kinds of audit report Modified opinion for emphasis and not affecting auditor’s opinion Modified opinion-disclaimer, qualified and adverse opinion

Introduction: Communication of audit conclusions after having carried out the audit process Summarized expression of certain facts and opinions regarding the conduct of audit To know the proper use of GAAP and GCC Section 227 of the companies act specifies the including of a company audit report 1

Basic elements of an audit report: Title: Nature of report distinguishes from other report Addressee: Addressing a person for forward The engagement or the relevant statute determined the required person Submitted the person who appoints the auditor 2

Cont… Introductory paragraph: Financial statement are identified by the title, period covered and the entity Clear marking of the responsibility Involvement of financial statement for significant accounting estimate, determination and methods 3

Cont… Scope paragraph: Examining on a test basis, evidence to support the account Assessing accounting principles for preparation of financial statements Assessing the significant estimates made by the management Evaluating the overall financial statement preparation 4

Cont… Opinion research: Date of the report: 5

Cont… Place of report: Auditor’s signature: 6

Specimen of a clean auditor’s report: Auditing the attached Balance Sheet of ABC as at 31st March 2005 and the Profit and Loss Account of the same time Responsibility is to express an opinion based on the audit Conducting the audit according to the auditing standard accepted in India Requires planning and performances to obtain reasonable assurance whether from material misstatements 7

Cont… Includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements Also includes the assessment of accounting principles used and significant estimates evaluating the overall financial statements presentation According to the explanation given, true and a fair view are found 8

Kinds of audit report: Clean or unqualified report: The financial statement are prepared using Generally Accepted Accounting Principles (GAAP) Comply with the relevant statutory requirements Adequate disclosure of all material related to the proper presentation of the financial operation Changes the accounting method in accordance with what is permissible 9

Cont… Modified report: Matter that do not affect the auditor’s opinion: - Emphasis on matter Matter that do affect the auditor’s opinion: - Qualified opinion - Disclaimer of opinion -Adverse opinion 10

Modified opinion for emphasis not affecting the auditor’s opinion: May find it useful to incorporate reference to certain matters disclosed in financial statement Such reference is indicated before opinion paragraph Purpose of highlighting the important of such facts the conjoining reading beneficial for the understanding the report 11

Cont… Not taken as any reservation on the part of auditor relation to the opinion expressed beneath Going concern concept implies current assets held for realization The accounting of transactions and balances would require consequence changes when the going concern concept is impaired 12

Modified opinion-disclaimer, qualified and adverse opinion: Limitation on the scope of the auditor’s work Disagreement with management regarding the : - Acceptability of the accounting policies selected - Method of the application - The adequacy of financial statement disclosures 13

Cont… A qualified opinion: Expressed when the auditors conclude Clearly indicates the reasons for the qualification An adverse opinion: Expressed when the effect of disagreement is so material Qualification of the report is not adequate to disclose the misleading of financial statements 14

Conclusion: To uphold the overall auditing strategy of a company Taking decision for the financial statement based on the prepared report Reducing the misleading or the misstatement of the audit plan 15

Probable questions: Broad Questions: Short Questions: Narrate the basic elements of an audit report in a nutshell. What is scope paragraph? What does the scope paragraph describe? Short Questions: What is an audit report? Who is an addressee? What is a clean report?

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