Ministry of higher education, science and innovation tashkent state university of economics

Completion of the audit. Auditor's report and auditor's conclusion

The completion of an audit marks the final stage in the audit process. It involves the auditor's evaluation of the audit evidence gathered, the formulation of audit conclusions, and the preparation of the auditor's report. This article explores the key aspects of completing an audit, including the auditor's report and conclusion. It discusses the purpose and components of the auditor's report, the different types of audit opinions, and the importance of effective communication of audit findings. By adhering to professional standards and best practices, auditors can provide stakeholders with reliable and informative reports that enhance transparency and accountability.
I. Auditor's Report:
The auditor's report is a formal document prepared by the auditor that communicates the findings and conclusions of the audit. It is addressed to the organization's shareholders, board of directors, and other stakeholders. The report provides an opinion on whether the financial statements present a true and fair view of the organization's financial position, results of operations, and cash flows. Key components of the auditor's report include:
Report Title: The report begins with a title that clearly identifies it as an auditor's report. It may include phrases such as "Independent Auditor's Report" or "Report on the Financial Statements."
Addressee: The report specifies the intended recipients, typically the shareholders, board of directors, and other stakeholders. This ensures that the report is directed to the appropriate audience.
Opinion Paragraph: The opinion paragraph is the most critical part of the auditor's report. It states the auditor's opinion on whether the financial statements are presented fairly in all material respects in accordance with the applicable financial reporting framework. The opinion can be unmodified (also known as a clean opinion), modified, or a disclaimer of opinion.
Basis for Opinion: The basis for the auditor's opinion section provides a description of the audit procedures performed, the audit evidence obtained, and the auditor's evaluation of the organization's accounting policies and significant estimates. It highlights the auditor's responsibility and the scope of the audit.
Key Audit Matters: In certain cases, the auditor's report may include a section on key audit matters. These are matters that the auditor considered to be the most significant in the audit and required significant auditor attention. This section provides additional insights into the audit process and areas of focus.
Other Reporting Responsibilities: The auditor's report may include additional reporting responsibilities, such as reporting on the internal control over financial reporting or compliance with laws and regulations, if applicable.
Auditor's Signature and Date: The auditor's report concludes with the signature, address, and date of the audit firm or the individual auditor responsible for the audit. This confirms the auditor's professional involvement and accountability.
II. Auditor's Conclusion:
The auditor's conclusion refers to the overall assessment and conclusions reached by the auditor after completing the audit. It involves evaluating the audit evidence gathered, assessing the organization's compliance with accounting standards and regulatory requirements, and forming an opinion on the effectiveness of internal controls. Key considerations in the auditor's conclusion include:
Evaluation of Audit Evidence: The auditor evaluates the sufficiency, appropriateness, and reliability of the audit evidence obtained during the audit. This includes examining supporting documentation, performing analytical procedures, and conducting substantive testing. The evaluation of audit evidence is essential for forming conclusions on the financial statements' accuracy and fairness.
Compliance with Accounting Standards: The auditor assesses whether the organization has prepared its financial statements in compliance with the applicable accounting standards. This involves reviewing the organization's accounting policies, significant accounting estimates, and disclosures to ensure consistency, accuracy, and compliance.
Compliance with Regulatory Requirements: The auditor also evaluates the organization's compliance with relevant regulatory requirements, such as tax regulations, industry-specific regulations, and legal obligations. This assessment ensures that the organization has fulfilled its reporting obligations and followed the necessary rules and regulations.
Effectiveness of Internal Controls: The auditor assesses the effectiveness of the organization's internal controls over financial reporting. This includes evaluating the design and implementation of controls, testing their operating effectiveness, and identifying any deficiencies or weaknesses that may affect the reliability of the financial statements.
Formulation of Audit Conclusions: Based on the evaluation of audit evidence, compliance with accounting standards, regulatory requirements, and the effectiveness of internal controls, the auditor formulates audit conclusions. These conclusions relate to the overall fairness of the financial statements, the effectiveness of internal controls, and any significant findings or issues identified during the audit.
Types of Audit Opinions: The auditor's conclusion is reflected in the opinion paragraph of the auditor's report. The opinion can be unmodified, modified, or a disclaimer of opinion. An unmodified opinion indicates that the financial statements present a true and fair view. A modified opinion highlights specific issues or limitations affecting the financial statements' presentation. A disclaimer of opinion occurs when the auditor is unable to obtain sufficient audit evidence to form an opinion.
The completion of an audit involves the formulation of the auditor's report and conclusion, which communicate the findings, opinions, and conclusions of the audit to stakeholders. By adhering to professional standards and best practices, auditors can ensure the accuracy, reliability, and transparency of the auditor's report. Effective communication of audit findings and opinions enhances stakeholder confidence, supports informed decision-making, and promotes transparency and accountability within organizations.