In
an audit process, the auditor involved gives his opinion regarding the
financial information which is disclosed by the business. The final report
given by the audit is considered as the final business financial statement. At
the end of the audit session, the auditor gives his opinion about the report.
The report can be either qualified or unqualified.
The
report begins with the inspection of the audit engagement. Henceforth, the
report of the audit is mainly classified into three major aspects. The first
section explains about preparing the financial statements as well as
maintaining the sound internal controls are the complete responsibility of the
management. In the second phase, the auditor explains about duties, roles, and
responsibilities regarding the audit process. Here, the audit mainly focuses on
audit nature and the internal controls of the auditor as well as accounting records
based on the sample. In the third phase, the auditor gives his final statement
regarding the audit.
Understanding the
concept of qualified audit report
In
a qualified audit report, the auditor concludes that many things have been
dealt in an efficient way, and it is exceptional for few of the issues. An
auditor report is said to be qualified when there is limitation in the
auditor's work or when there is adequacy of the accounting policies.
For
an auditor, the issue must be a material else it must be financially worth to
consider it as a qualified report. Here, the issue should not be considered as
a pervasive and also the issue should not misrepresent the factual financial
position. If the issues are material as well as pervasive, then the auditor issues
an adverse opinion. A qualified auditing report doesn’t indicate that your
business is suffering. It also doesn’t mean that the financial statement is not
transparent. It just reflects the inability of the auditor to give a clean
report.
Conclusively,
the business owners should consider that there are certain deep held
perceptions regarding the auditor's opinion. Some people rely on the audited
financial statements for their financial and analytical requirements. Hence, it
would be better to expect for an unqualified audit report which would have a
positive impression of your business.
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