Scribd
Upload
12 views

Audit Report Course Work

This document discusses different types of audit reports and opinions that can be issued by an auditor after completing an audit. It outlines four main types of audit opinions: 1) unqualified opinion, which indicates clean financial records; 2) qualified opinion, which means financial records were not fully compliant but contained no misrepresentations; 3) adverse opinion, a red flag indicating gross misrepresentations or potential fraud; and 4) disclaimer of opinion, where the auditor cannot provide a clear opinion due to limitations. The document provides details on each type of report.

Uploaded by

Nyakashaiaja kenneth
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
12 views

Audit Report Course Work

This document discusses different types of audit reports and opinions that can be issued by an auditor after completing an audit. It outlines four main types of audit opinions: 1) unqualified opinion, which indicates clean financial records; 2) qualified opinion, which means financial records were not fully compliant but contained no misrepresentations; 3) adverse opinion, a red flag indicating gross misrepresentations or potential fraud; and 4) disclaimer of opinion, where the auditor cannot provide a clear opinion due to limitations. The document provides details on each type of report.

Uploaded by

Nyakashaiaja kenneth
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 4

KYAMBOGO UNIVERSITY

FACULTY ARTS AND SOCIAL SCIENCES

DEPARTMENT OF ECONOMICS AND STATISTICS

BACHELORS OF MICROFINANCE

COURSE UNIT: AUDITING AND INVESTIGATION IN MICROFINANCE

INSTITUTIONS

COURSE CODE: AMF 2103

YEAR: TWO

SEMESTER: ONE

LECTURER: ……………………………………………………

MEMBERS

NAME REG. NO. SIGNATURE

AKELLO PRISCILA 18/U/MFE/11864/PE

AGERO SANDRA 18/U/MFD/11726/PD

QUESTION:
State and explain different audit reports and opinion that you would upon your completion of your audit
exercise.
Audit Report is the basis for determining the financial capacity and quality of the company and
completed by an independent accounting professional known as Auditor. Audit reports are
required by law if a company is publicly traded or in an industry regulated by the Securities and
Exchange Commission (SEC). Companies seeking funding, as well as those looking to improve
internal controls also audit their books of account.

After a thorough audit of the books accounts, the auditor has to give his or her opinion in an
audit report. The audit opinion is very important for stakeholders because it lets them know
whether or not the information in the financial statements they are using is correct. They can use
that information for their decision-making.

There are four different types of audit report and opinions that I can issues as an auditor based
on the analysis of the company’s financial statements.
1. Unqualified opinion-clean report
2. Qualified opinion-qualified report
3. Adverse opinion-adverse audit report
4. Disclaimer of opinion-disclaimer report

Unqualified Opinion - Unqualified Audit Report


This is often called a clean Report or 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 company can
receive. Typically, an unqualified report consists of a title that includes the word “independent.”
This is done to illustrate that it was prepared by an unbiased third party. The title is followed by
the main body. Made up of three paragraphs, the main body highlights the responsibilities of the
auditor, the purpose of the audit and the auditor’s findings. The auditor signs and dates the
document, including his address.
Qualified Opinion - Qualified Audit Report
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 Opinion - Adverse Audit Report


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. An auditor’s adverse
opinion is a big red flag. An adverse audit report usually indicates that financial reports contain
gross misstatements and have the potential for fraud. Financial institutions and investors take this
opinion seriously and will reject doing any kind of business with the company.

Disclaimer of Opinion - Disclaimer Report


When an auditor issues a disclaimer of opinion report, it means that they are distancing
themselves from providing any opinion at all related to the financial statements. Some of the
reasons that auditors may issue a disclaimer of opinion are because they felt like the company
limited their ability to conduct a thorough audit or they couldn’t get satisfactory explanations for
their questions. They may not have been able to decipher the correct nature of some transactions
or to secure enough evidence to support good financial reporting. Auditors that aren’t allowed an
opportunity to observe operational procedures or to review particular procedures may feel like
they’re not able to express a definite opinion, so they feel a disclaimer is necessary and in order.
The general consensus is that a disclaimer of opinion constitutes a very harsh stance. As a result,
it creates an adverse image of the company.

In conclusion, based on the facts and circumstances of each type of audit assignment, the auditor
is needed to modify its opinion by taking professional judgments.
REFERENCES

David, R. (2017). Contribution of records management to audit opinions and accountability in


government. South African Journal of Information Management, 19(1), 1-14.

Auditing & Assurance Services: A systematic approach. Messier, W and C. Emby. McGraw-Hill
Ryerson Limited, 2005.

Audit Committee Reports Before and After Sarbanes-Oxley: A Study of Companies Listed on
the NYSE Archived 2015-02-14 at the Wayback Machine The CPA Journal.

PPC's Guide to Auditor's Reports, Thomson Publishing Group, Vol. 1, Chapter 6: Uncertainties,
Section 606: Going Concern Problemsal opinions.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy