AUDITING
Audit Opinions
- Unqualified: Often called a clean opinion, an unqualified opinion is an audit report that is issued when
an auditor determines that each of the financial records provided by the small business is free of any
misrepresentations. In addition, an unqualified opinion indicates that the financial records have been
maintained in accordance with the standards known as Generally Accepted Accounting Principles
(GAAP). This is the best type of report a business can receive.
- Qualified: In situations when a company’s financial records have not been maintained in accordance
with GAAP but no misrepresentations are identified, an auditor will issue a qualified opinion. The writing
of a qualified opinion is extremely similar to that of an unqualified opinion. A qualified opinion,
however, will include an additional paragraph that highlights the reason why the audit report is not
unqualified.
- Adverse: The worst type of financial report that can be issued to a business is an adverse opinion. This
indicates that the firm’s financial records do not conform to GAAP. In addition, the financial records
provided by the business have been grossly misrepresented. Although this may occur by error, it is often
an indication of fraud. When this type of report is issued, a company must correct its financial statement
and have it re-audited, as investors, lenders and other requesting parties will generally not accept it.
- Disclaimer: On some occasions, an auditor is unable to complete an accurate audit report. This may
occur for a variety of reasons, such as an absence of appropriate financial records. When this happens,
the auditor issues a disclaimer of opinion, stating that an opinion of the firm’s financial status could not
be determined.
HOW TO WRITE AUDIT REPORT
1. Title of the report:
2. Address of the company:
3. type of the report:
Note: we have audited the books of account (trial balance) of ABU hotels Plc as at 31 st December, 2018.
And a summary of the significant accounting policies and other explanatory notes. The followings are
our submissions
1. Management responsibility for the financial statement:
Management is responsible for the preparation and fair presentation of this financial statements
in accordance with international financial reporting standards
This responsibility includes:
a. Designing
b. Implementing
c. And maintaining internal control relevant to the preparation of financial statements that are
free from material misstatement, whether due to fraud or error, selecting and applying
appropriate accounting policies and making accounting estimates reasonable in the
circumstances.
2. Auditors responsibility
Our responsibility is to express an opinion on this financial statement based on our audit. We
have conducted and our audit is in accordance with international standards on auditing and
other relevant regulations. those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance whether the financial
statements are free from material misstatement. An audit involves performing procedures to
obtain audit evidence about the amount and disclosure in the financial statements. The
procedures selected depends on the auditor’s judgement including assessment of risk of
material misstatements of financial statements, whether due to fraud or error, in making those
risk assessment, the auditor considers internal control relevant to the entity’s preparation and
fair presentation of the financial statement in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the internal control system. Audit also involves evaluating appropriateness of
the accounting policies used and the reliability of the accounting estimates presented by the
management. We believe that the audit evidence we obtain is sufficient and appropriate to
provide a basis for our audit opinion.
3. Opinion
In our opinion, the financial statement gives a true and fair view (present fairly in all material
respect) he financial performance and cash flow for the year ended in accordance with IFRS.
FORMAT
I. Auditors name:
II. Auditor’s signature/seal
III. Date of the audit: usually 3 months from the accounting date (year ended)
IV. Auditor’s address:
