Formal report on the basis of legal formalities: The reports that are prepared in prescribed forms and are presented according to some established procedures to the proper authorities are called formal reports. Examples of formal reports are statutory report, directors’ report, auditor’s report, annual report etc. Basically formal reports may be of the following two types-
(a) Statutory report: Statutory report is prepared by the board of directors or by the auditor or by the company secretary in prescribed format as per the rules of Company Act for submitting it to the shareholders and registrar of the joint stock companies. Statutory reports cap be of the following three types:
- Report presented in statutory meeting: The reports that are drafted by the directors of a public limited company to forward to the shareholders at least 21 days before the date of statutory meeting is called statutory report.
- Directors’ report: At the end of every financial year, the directors prepare a short statement on the overall activities of the company. This statement is called directors’ report. It is attached to the company’s annual report.
- 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. It is also an essential pan of company’s annual report.
(b) Non-statutory report: The reports that are prepared not to abide by legal formalities rather to provide support and help in performing organizational activities smoothly are called non-statutory reports. Reports on labour unrest, reports on factory planning, reports on labour absenteeism etc. are the examples of non-statutory reports.