Question

Draft appropriately modified opinion audit reports under a variety of circumstances.

Answer 1

AUDIT REPORT

AUDITING IS THE PROCESS OF SCRUTINIZING ACCOUNTING RECORDS OF THE COMPANY IN ORDER TO FIND OUT THE ACCURACY OF ACCOUNTS. AUDITOR SHOULD EVALUATE AND ANALYZE ACCOUNTING RECORDS AND VERIFY IT WITH SUPPORTING EVIDENCE TO ENSURE THE CORRECTNESS AND ALSO TO FIND OUT THE MANIPULATIONS IN ACCOUNTS.

COMPANIES SHOULD HAVE INTERNAL AS WELL AS EXTERNAL AUDITORS SO AS TO ENSURE CLEAN AND PERFECT ACCOUNTING RECORDS

AUDITORS PREPARE REPORTS ON THE BASIS OF THEIR FINDINGS AND THE MANAGEMENT TAKE NECESSARY STEPS TO OVERCOME THE PROBLEMS POINT OUT IN THE AUDIT REPORT. IT ALSO NECESSITATE THE MANAGEMENT TO TAKE RIGHT DECISIONS IN ACHIEVING ORGANIZATIONAL GOALS. COMPANIES FINANCIAL POSITION CAN BE EASILY UNDERSTOOD FROM THE AUDIT REPORT.......

TYPES OF AUDIT REPORTS

AUDIT REPORT USUALLY CONTAINS THE OPINION OF THE AUDITOR .SO THERE ARE 4 TYPES OF AUDIT REPORTS

1. UNQUALIFIED OPINION

2 QUALIFIED OPINION

3 ADVERSE OPINION

4 DISCLAIMER OF OPINION

LETS EXPLAIN THESE FOUR THINGS

1 UNQUALIFIED OPINION

IF THE FINANCIAL RECORDS OF THE COMPANY ARE IN ACCORDANCE WITH THE PRINCIPLES OF ACCOUNTING, THE AUDITOR PREPARE A REPORT CALLED UN QUALIFIED REPORT. IT MEANS THAT THERE IS NO MISREPRESENTATIONS FOUND IN ACCOUNTING RECORDS. AN UNQUALIFIED REPORTED SHOULD START WITH A TITLE 'INDEPENDENT' MEANS THE RECORDS HAVE NO MANIPULATIONS AND FOLLOW ACCOUNTING RULES PERFECTLY.

                THESE REPORTS USUALLY CONSIST OF TWO OR THREE PARAGRAPHS . FIRST PARAGRAPH SPECIFIES ABOUT THE DUTY AND RESPONSIBILITIES OF THE AUDITOR. THE PURPOSE BEHIND THE AUDIT SHOULD BE HIGHLIGHTED IN SECOND PARAGRAPH AND THE AUDITORS FINDINGS IN LAST PARAGRAPH....IT ALSO CONTAIN AUDITORS NAME,HIS ADDRESS ,DATE AND SIGNATURE.

2 QUALIFIED OPINION

THESE TYPE OF REPORTS ARE PREPARED WHEN THE ACCOUNTING PRINCIPLES ARE NOT PROPERLY FOLLOWED BY THE COMPANY. THIS TYPE OF COMPANY HAVE CLEAN ACCOUNTING RECORDS,BUT THEY ARE NOT FOLLOWING GENERALLY ACCEPTED PRINCIPLES OF ACCOUNTING. IN SUCH A CASE ONE MORE PARAGRAPH ALSO INCLUDED BY THE AUDITOR SPECIFYING WHY IT IS A QUALIFIED OPINION.

3. ADVERSE OPINION

AS THE NAME SPECIFIES ,THESE ARE THE REPORTS PROVIDED BY AUDITORS WHEN THE ACCOUNTING RECORDS ARE MANIPULATED AND IT DOES NOT FOLLOW THE ACCOUNTING PRINCIPLES. IN SUCH A CASE COMPANY SHOULD CORRECT THE RECORDS AND RE AUDIT THE BOOKS OF RECORDS.

4.DISCLAIMER OF OPINION

THESE TYPE OF AUDIT REPORTS ARE PREPARED WHEN THE AUDITOR FAILS TO AUDIT THE ACCOUNTING RECORDS PROPERLY DUE TO UN AVAILABILITY OF SUPPORTING DOCUMENTS OR SUCH OTHER REASONS.

THESE ARE THE 4 TYPES OF REPORTS USUALLY PREPARED BY AUDITORS

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