Qualified audit report statements that have material misstatements on them. But those material misstatements are not pervasive

Why is Professional Audit Report Important for an Organization?

The importance of auditing can be overstated. A professional auditor not just clears

all your issues, but also helps in improving your organisation. An auditor’s statement

provides an opinion on the reliability and validity of a company’s financial statements.

What is an Auditor’s Report?

An auditor’s report is a written letter from the auditor containing the opinion of

whether the firm’s financial statements comply with Generally Accepted Accounting

Principles (GAAP). The independent and external audit report is typically published

with the company’s annual report. The auditor’s report is issued based on the result

of auditor’s professional examination against the measurement conditions or

standards.

For example, auditors conduct their audit on the client’s financial statements against

the accounting standard that used to prepare the financial report.

Types of Audit Report

There are four main types of an audit report. They are

1. Unqualified audit report –It is issued by the auditor to financial statements when auditor finds no substantial misstatements after their testing. This report encloses the unqualified opinion from an independent auditor. 2. Qualified audit report –This report is issued by the auditor to the financial statements that have material misstatements on them. But those material misstatements are not pervasive 3. Adverse Audit report –This type of audit report is issued to the financial statements when auditors find that there are material misstatements in the financial report. The errors found here are different from the material misstatements found in qualified audit report