Auditor's report
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The auditor's report is a formal opinion issued by an independent auditor, which is attached to a company's annual report. The auditor's report is intended to advise investors and other financial statement users whether the company's financial statements have been prepared in accordance with Generally Accepted Accounting Principles (GAAP), whether they are free of material misstatement and whether they show a "true and fair" view of the operating results, financial position and cash flows of the company concerned.
Typically, an auditor's report consists of three paragraphs. The first states the responsibilities of the auditor and directors; the second gives the scope of audit work, stating that GAAP was used; while the third paragraphas gives the auditor's opinion.
Sample of an unqualified auditor's report:
We have audited the financial statements of the ABC
Company which have been prepared in accordance with
accounting principles generally accepted in Philippine.
- Respective responsibilities of directors and auditors
The Company Ordinance requires the directors to prepare financial statements which give a true a fair view. In preparing financial statements which give a true and fair view it is fundamental that appropriate accounting policies are selected and applied consistently.
It is our responsibility to form an independent opinion, based on our audit, on those statements and to report our opinion to you.
- Basis of opinion
We conducted our audit in accordance with Philippine Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements give a true and fair view of the financial position of the company as of Dec.31, 20XX, and of the results of its operations and its cash flows for the year then ended in accordance with Philippine Financial Reporting Standards.
AUDITOR
Date Address
Types of auditor's report
- Unqualified report
- Qualified report
- Modified report
- Unmodified report
- Except for
- Disagreement
- Disclaimer
See also
- International Standards on Auditing
- ISA 700 The Auditor's Report on Financial Statements
External links
- HKICPA: HKSA 700 - The Independent Auditor's Report on Financial Statements.
Category: Auditing
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