CONTENTS
REPORT
AUDIT
UNQUALIFIED
REPORT
QUALIFIED
REPORT
Audit report is the final stage of audit process. The results of the audit are communicated through audit
report. Audit report is the written opinion of an auditor regarding companies financial statements. Audit
report is a document prepared by an auditor to certify the financial position and accounting records of a
firm.
Audit report is the statement included in the financial statements. It contains the opinion of the auditor
in financial statements. The auditor reports to the shareholders who have appointed him. He has to
provide his opinion on the truth and fairness of financial statements. Thus, the auditor protects the
interest of shareholders through audit report.
a report is a statement of collected and considered facts, so drawn up as to give clear and concise
information to persons who are not already in possession of the full facts of subject matter of the
report.”
Under Sec. 143(3), auditor of a company must report to its members.
(a) The accounts examined by him;
(b) Balance Sheet, Profit and Loss Account, and Cash Flow statement, which are laid in general meeting
of a company during his tenure of office; and
(c) The document declared to be attached to the Balance Sheet and Profit and Loss Account.
1. Title of the report
The title of audit report should help the reader to identify the report. It should disclose the name of the
client. The title distinguishes the audit report from other reports.
2. Name of the Addressee
The addressee normally refers to the person who appoints the auditor. If a company appoints the
auditor, the addressee should be shareholders. As per law, the complete address of the addressee is
required. Addressee for the statutory audit shall be shareholders and in case of Special Audit, it is Central
Government.
3. Introductory Paragraph
The introductory paragraph should specify that it is the auditor’s opinion on financial statements audited
by him. The period covered by financial statements should be stated with exact dates.
4. Scope
This part should include the matter-of-fact relating to the manner in which audit
examination was made. The audit examination should cover company’s accounts, Profit
and Loss Account, Balance Sheet and Cash Flow Statements. The examination should be
as per the relevant law. The auditor should not curtail or limit any examination task.
5. Opinion
The auditor’s opinion on the books of account and financial statements examined by him is
based on the information and free from bias. Whether the financial statements are
arithmetically correct and correspond to the figures recorded in the books of accounts.
In case of unqualified opinion, whether the financial statements represent a true and
fair view of the state of affairs and the results of operations.
In case of qualified opinion, if the Balance Sheet and Profit and Loss account do not
present a true and fair view, the reasons for what and where is wrong.
6. Signature
The signature part should include the manual signature of the auditor.The personal name
and signature of the auditor should be given. If the auditor is a firm, the signature in the
personal name and firm name should be given.
7. Place of Signature
This should include the location of the auditor or the auditor firm, which is ordinarily their
city.
8. Date of the Report
The date of completion of the audit work should be mentioned in this section.
1. Clean or Unqualified Report
Clean or Unqualified report will be given by the auditor if the auditor is satisfied that the
accounts, Balance Sheet, Profit and Loss Account and Cash Flow statement do represent a
true and fair view and they are prepared in conformity with the accounting principles and
statutory requirements.
2. Qualified Report
In qualified report the auditor believes that overall financial statements are not fairly stated.
The reasons for giving Qualified Report are be as follows:
i. The books of accounts, Profit and Loss Account and the Balance Sheet do not represent
the true and fair view of the state of affairs and results of the operations, due to lack of
conformity with the accounting principles and statutory requirements,
