 WHAT IS AUDITOR’S REPORT?
 IMPORTANCE OF AUDITOR’S REPORT.
 BASIC ELEMENT OF AUDITOR’S REPORT.
 CONTENTS OF AUDITOR’S REPORT.
 TYPES OF AUDITOR’S REPORT.
 TYPES OF QUALIFICATIONS.
 PRESENTATION OF AUDIT REPORT.
An auditor’s report is a formal result of all
the effort that goes into an audit. It presents
the result of the examinations done by the
auditor.
One of the reports on which the shareholders
depend for forming their opinion about the
management is the auditor’s report. Audit
report helps to maintain high standard of
integrity in the company affairs.
 Title
 Addressee
 Opening or introductory paragraph
 Identification of financial statements
audited
 Date and period covered
 Statements of responsibility:
 Scope paragraph:
 Opinion paragraph:
 Date of completion of audit
 Auditor’s address
 Auditor’s signature
 Firm and / or personal name of auditor.
 First Clause
Whether or not in their opinion proper books of
accounts as required by the Ordinance have
been kept by the Company.
 Second Clause
Whether or not in their opinion;
 the balance sheet and porfit and loss account
or the income and expenditures accounts have
been drawn up in conformity with the
ordinance and are in agrrement with the book
of accounts
 the expenditure incurred during the year was
for the purpose of the company
 the business conducted, investments made and
expenditure incurred during the year were in
accordance with the objects of the company.
 Third clause
Whether or not in their opinion and to the best
of their information and according to the
explanations given to them, the balance sheet,
profit and loss account and cash flow
statement conform with the approved
accounting standards as applicable in Pakistan
and give the information required by the
Company Ordinance, 1984, in the manner so
required and respectively give a true and fair
view of the state of the company as at (Date)
 Fourth Clause
Whether or not in their opinion Zakat
deductible at source under the Zakat Ushr
Ordinance, 1980, was deducted by the
company and deposited in the Central Zakat
Fund established under section 7 of the
Ordinance.
 Unqualified Audit Report
This type of report is issued by an auditor
when the financial statements presented are
free of material misstatements and are in
accordance with GAAP, and the auditor does
not detect any significant internal control
breakdown during his examination.
 Qualified Audit Report
This type of opinion is very similar to an
unqualified or "clean opinion", but the report
states that the financial statements are fairly
presented with a certain exception which is
otherwise misstated.
 Disclaimer of opinion
The auditor is unable to give an opinion
whether the financial statements are true
and fair.
 Adverse Opinion
The auditor expresses his views of financial
statements to be untrue.
 Subject to Opinion
The auditor disclaims his opinion on a
particular aspect of financial statements.
 Except opinion
The auditor expresses adverse opinion on a
particular aspect of financial statements.
 An audit report is always included in the
annual report of the company.
 It should be brief, preferably of one page.
 Along with an auditor’s report, the balance
sheet, cash flow statement, statement of
change in equity and the loss and profit
account of the audited period is annexed.
 Notes to the financial statements enable the
reader of the report to understand the
significant information of the financial
statements.
 The language of the report should be
understandable by its readers.
 It should contain constructive advise or
healthy criticism instead of an unsupportive
tone.