Difference between Audit Report & Audit CertificateAudit ReportAudit certification

1. A report would be slightly more comprehensive. It would include the work done by the assurer, their findings and their results. Again a report may be for a specific area / item etc.1. A certificate would be more specific. For example certifying the sales of an outlet etc. This means that the assurer has only checked and certified the items or numbers appearing in the certificate.

2. The report is based on assumptions and estimations2. The certificate which is based on actual figures and facts.

3. The report is actually an opinion by the auditors and does not guarantee the accuracy of the accounts.3. The certificate is a formal statement by the auditors which guarantee the accuracy of the accounts.

4. The reports results in limited responsibility for the auditor4. The certificate, since it is a duly signed formal statement implicates total responsibility for the auditors.

5. Auditor Report is not a guarantee of the absolute correctness & accuracy of the books of accounts.5. the auditor certificate serves as a guarantee of the absolute correctness & accuracy of the books of accounts

6. Auditor Report is later on found to be wrong, he cannot be held responsible since he has given merely his opinion on the state of affairs of the company.6. if the duly signed certificate is found as wrong, he will be held responsible

Types of Audit OpinionsAn audit opinion is expressed on audited statements. Types of Audit Opinions1. Unqualified opinion the unqualified opinion has no reservations concerning the financial statements. This is also known as a clean opinion meaning that the financial statements appear to be presented fairly.Often called a clean opinion, an unqualified opinion is an audit report that is issued when an auditor determines that each of the financial records provided by the small business is free of any misrepresentations. In addition, an unqualified opinion indicates that the financial records have been maintained in accordance with the standards known as Generally Accepted Accounting Principles (GAAP). This is the best type of report a business can receive.2. Qualified opinion In situations when a companys financial records have not been maintained in accordance with GAAP but no misrepresentations are identified, an auditor will issue a qualified opinion. The writing of a qualified opinion is extremely similar to that of an unqualified opinion. A qualified opinion, however, will include an additional paragraph that highlights the reason why the audit report is not unqualified.3. Disclaimer opinion on some occasions, an auditor is unable to complete an accurate audit report. This may occur for a variety of reasons, such as an absence of appropriate financial records. When this happens, the auditor issues a disclaimer of opinion, stating that an opinion of the firms financial status could not be determined.4. Adverse opinion the worst type of financial report that can be issued to a business is an adverse opinion. This indicates that the firms financial records do not conform to GAAP. In addition, the financial records provided by the business have been grossly misrepresented. Although this may occur by error, it is often an indication of fraud. When this type of report is issued, a company must correct its financial statement and have it re-audited, as investors, lenders and other requesting parties will generally not accept it.

Basic elements of audit report;Basic Element of an Audit Report1. Title: The title indicates the nature of report. 2. Addressee: The auditors report should address the person to whom it is meant to be forwarded. 3. Opening (or) introductory paragraph1. Identification of financial statements audited.2. A statement on the responsibility of the entitys management and that of auditor.4. Scope paragraph1. A reference to the auditing standards generally accepted in BD.2. A description of work performed by the auditor.5. Opinion paragraph1. A reference to the financial reporting framework used to prepare the financial statements.2. Expression of opinion on the financial statements6. Date of the report: The date of report indicates the date on which the auditor signs his report.7. Auditors signature: The report should be signed by the auditor in his personal name.

Sometimes, the governing enactments may require of certain statements (or) matters in (or) with the auditors report. In such cases, the auditors report include all those matters in addition to the matters as specified in AAS above.

A good report must at least meet the following qualifications:1. It should be based on the factual information.2. It should be convincing3. It should be forceful4. It should be unbiased5. It should point out mistakes6. It should be a constructive criticism and not be in reprimanding tone7. It should offer constructive and timely suggestions to management.8. It should be brief. If it is lengthy, the object of the report is defeated even if it is well written.Contents of Audit ReportAudit report should contain the following things.1. Answer, clarification and explanation of furnished questions are given by the concerned authority satisfactory or not.2. Income statement and balance sheet is prepared by the company in prescribed structure or not.3. Accounts are maintained as per the provision of laid down rules and regulations or not.4. Balance sheet of the company presents true and fair view of financial position or not.5. High ranking official, representatives and staffs of the company have performed work as per the provision of rules and regulations or not; they have committed fraud or not.6. Transactions of the company are satisfactory or not.7. Auditor should provide suggestion if necessary.

In addition to above facts, an auditor should include other facts using his own discretion. Other facts which are to be incorporate in the report are given below:1. An auditor should include all the facts demanded by the Company Act.2. Auditor should include the true and fairness of books of accounts as well as facts where he is not able to satisfy himself.3. Auditor should include all the important facts which directly affect the financial position of the company.4. An auditor should include in the report that the audit of books of account is made in detail or applying test check.5. If there is special situation, an auditor should include it in the audit report.6. If auditor detects any frauds and errors during the course of audit, he must include in audit report clearly stating their effect in financial statements.