10 Facts About Auditor's report

An auditor's report is a formal opinion, or disclaimer thereof, issued by either an internal auditor or an independent external auditor as a result of an internal or external audit, as an assurance service in order for the user to make decisions based on the results of the audit.

The Auditor's report is only an opinion on whether the information presented is correct and free from material misstatements, whereas all other determinations are left for the user to decide.

Qualified Auditor's report is given by the auditor in either of these two cases:.

Qualified Opinion Auditor's report is issued when the auditor encountered one of the two types of situations which do not comply with generally accepted accounting principles, however the rest of the financial statements are fairly presented.

Wording of the qualified Auditor's report is very similar to the Unqualified opinion, but an explanatory paragraph is added to explain the reasons for the qualification after the scope paragraph but before the opinion paragraph.

An additional paragraph "Basis for Disclaimer" is added in audit Auditor's report which is placed after Scope paragraph and before Opinion paragraph.

The disclaimer of opinion Auditor's report can be traced back to 1949, when the Statement on Auditing Procedure No 23: Recommendation Made To Clarify Accountant's Representations When Opinion Is Not Expressed was published in order to provide guidance to auditors in presenting a disclaimer.

The PCAOB Auditing Standards No 2 now requires auditors of public companies to include an additional disclosure in the opinion report regarding the auditee's internal controls, and to opine about the company's and auditor's assessment on the company's internal controls over financial reporting.

Auditor's report is modified to include all necessary disclosures by either presenting the report subsequent to the report on the financial statements, or combining both reports into one auditor's report.

However, if the auditor considers that the auditee is not a going concern, or will not be a going concern in the near future, then the auditor is required to include an explanatory paragraph before the opinion paragraph or following the opinion paragraph, in the audit Auditor's report explaining the situation, which is commonly referred to as the going concern disclosure.