Audit report
The objectives of the
auditor as per SA 700 (Revised) are:
 |
Non
Applicability of CARO 2020
·
One person company
·
Small companies (Companies
with paid-up capital less than/equal to Rs 50 lakh and with a last reported
turnover which is less than/equal to Rs 2 crore)
·
Banking companies
·
Companies registered for
charitable purposes
·
Insurance companies
·
The following private
companies are also exempt from the requirements of CARO, 2020: – Whose gross
receipts or revenue (including revenue from discontinuing operations) is less
than or equal to Rs 10 crore in the financial year – Whose paid-up share
capital plus reserves are less than or equal to Rs 1 crore as on the balance
sheet date (i.e. usually at the end of the FY) – Not a holding or subsidiary of
a Public company – Whose borrowings is less than or equal to Rs 1 crore at any time during the FY.
Audit
Report Format
The audit report format is as follows :
|
Auditor’s
Report for Audit Conducted in accordance with SAs
v Title
The title should mention – ‘Independent Audit Report’
v
Addressee
The addressee should mention as to whom the report is being presented. AR normally
addressed to those for whom AR is prepared shareholders/TCWG.
v Introductory
Paragraph
A statement that the financial statements described in the
report have been audited.
v Opinion
The most critical content in an Audit Report is the
Auditor’s Opinion. It mentions the impression derived after auditing the
financial statements.
v
Basis of the Opinion
It should mention the basis of achieving the opinion as reported
and the facts of the premise.
v Management’s
Responsibility
This section of the audit reports format should mention the
Management’s Responsibility to the integrity of the financial statements, which
gives an overview of the financial condition, cash flow of the company,
and financial performance. The responsibility also includes the maintenance of
accounting records to prevent fraud. It is their responsibility to formulate
and execute necessary financial controls to ensure the accuracy of the
financial records. It should mention that the financial statements are the
responsibility of the organization’s management.
v Auditor’s
Responsibility
The Auditor’s responsibility mentioned is to depict an unbiased opinion on the financial statements and issue an audit report. The report basis on Standards on Auditing. The Standards require that the auditor complies with ethical requirements. It is the auditor’s responsibility to plan and execute the audit to procure assurance regarding the financial statements.
v Other Reporting
Responsibility
Any other responsibility relating to reporting exists, the
auditor has to mention the same. It may include Regulatory requirements.
v Signature of the
Auditor
The auditor needs to sign the audit report, thereby confirming
the authenticity of the report.
v
Place of Signature
The name of the city in which the signing of the report
happened.
v
Date of Audit Report
The date on which the audit report is signed/reported;
Sample Audit Report Format Example:
Below mentioned is a sample format of an Auditor’s Report :
Independent Auditor’s
Report
To the Partners of ABC
& Associates [or Other Appropriate Addressee]
Opinion
We have audited the financial statements of ABC & Associates which comprise the Balance Sheet as of 31.03.2021 and the statement of Profit and Loss Account and the notes to the financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the company as of 31.03.2021 and the Profit & Loss for the year ending on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing
(SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities
under those Standards are further described in the Auditor’s Responsibilities for
the Audit of the Financial Statements section of our report. We are independent
of the Company in accordance with the Code of Ethics issued by the Institute of
Chartered Accountants of India together with the ethical requirements that are relevant
to our audit of the financial statements under the provisions of the Companies Act,
2013 and the Rules thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the Code of Ethics. We
believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion
Management’s Responsibility for the Standalone Financial
Statements
The Company’s Board of
Directors are responsible for the matters stated in section 134(5) of the Companies
Act, 2013 (“the Act”) with respect to the preparation of these standalone
financial statements that give a true and fair view of the financial position,
financial performance, (changes in equity) and cash flows of the Company in accordance
with the accounting principles generally accepted in India, including the accounting
Standards specified under section 133 of the Act. This responsibility also includes
maintenance of adequate accounting records in accordance with the provisions of
the Act for the safeguarding of the assets of the Company and for preventing and detecting
frauds and other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that are reasonable and prudent;
and design, implementation, and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the accuracy and completeness
of the accounting records, relevant to the preparation and presentation of the financial a statement that gives a true and fair view and is free from material
misstatement, whether due to fraud or error. In preparing the financial
statements, management is responsible for assessing the Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concerned
and using the going concern basis of accounting unless management either intends to liquidate the Company
or to cease operations, or has no realistic
alternative but to do so. Those Board of Directors are also responsible for overseeing
the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of
the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the
basis of these financial statements.
A further description of our responsibilities for the audit of the
financial statements are included in an appendix X of this auditor’s
report. This description, which is located at [indicate the page
number or other specific reference to the location of the description],
forms part of our auditor’s report.
M/s NKH & Associates
Chartered Accountants
(Firm’s Registration No.)
Signature Name of the Member Signing
the Audit (Report)
(Designation)
(Membership No. XXXX)
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