Basic elements of the unqualified audit report.
1. Title
Audit reports should be addressed to the members of the company (on whose behalf the audit is undertaken) in the absence of alternative statutory or contractual agreements (e.g. in the case of a non-statutory audit).
2. Introductory paragraph
It identifies the financial statements audited by the use of page numbers, to distinguish such information from other documents that have not been subject to audit e.g. chairman‘s report.
This paragraph also refers to the accounting convention under which the financial statements have been prepared.
3. Statement of responsibility of directors and auditors (covered earlier)
4. Basis of opinion (scope paragraph)
Audit carried out in accordance with the International Standards on Auditing and Company‘s Act requirements and other statutory requirements.
5. A statement that the audit was planned and performed to obtain reasonable assurance that financial statements are free from material misstatements.
6. It should describe an audit as including:
a. Examining on a test basis evidence to support the financial statement amounts and disclosures.
b. Assessing the accounting policies used in preparing the financial statements
c. Assessing the significant estimates made by directors in preparation of financial statements.
d. Evaluating the overall financial statement presentation.
7. It should clearly state the auditor‘s opinion as to whether the financial statements give a true and fair view in accordance with financial reporting framework and their compliance with statutory requirements.
8. It should date the report as of audit completion date i.e. when the auditor receives all evidence required to support his opinion.
9. It should be signed in the audit firm‘s name and should name the audit firm office.
