QS Study

Meaning Auditor’s Report

The report of a certified auditor or auditors stating the accuracy of financial statements of a public limited company is known as auditor’s report. An auditor’s report provides an opinion on the validity and reliability of a company’s financial statements. It an essential part of a company’s annual report. At the end of every accounting year, the company has to prepare balance sheet, profit and loss account, cash flow statement and other related schedules to support the accounts. After preparation of books of accounts, the auditor examines and verifies those to know whether the statements represent a true and fair view of company affairs. After such verification, the auditor makes a report stating the followings:

  1. Whether the auditor has obtained all the information and explanations which were necessary for the purpose of his audit.
  2. Whether proper books of accounts as required by law have been kept by the company.
  3. Whether the financial information disclosed in the financial statements of the company has been prepared using acceptable accounting principles.
  4. Whether the accounting policies are consistently applied year after year.
  5. Whether the company’s balance sheet and profit & loss account are in agreement with the books of account and returns.