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Audit › Audit report

 December 20th, 2017  | Audit

The term audit report refers to the disclaimer that has been issued by the internal auditor or the external one showing all the stakeholders, investors and the board of directors that what has been done while the accounts were being checked. The effect of the audit report is always multidimensional and for the same reason it shows that what the financial health of the company indicates, what should be done to improve it, what are the investment opportunities when it comes to a particular business or what should be done by investors as well as the stakeholders to make sure that they get maximum advantage from the issue that company. The audit report should therefore always be presented in the best possible manner and when it comes to internal auditor then it is feasible to make sure that the report is presented to the board of governors before any action has been taken in relation to the outcome. The audit report is also required by several other entities that want to make sure that financial information of the company is disclosed to them if they want to do any business in this regard. Making of the audit report therefore also makes sure that the auditor is professional and knows the different terms that are related to the audit as well as the professional accounting. Making an audit report is not an easy task so the organization should make sure that an accounting firm with sound reputation is hired so the outcome is very much in line with the general accounting requirements of the organization. There are several benefits of the audit report and following are some of them explained in great detail:

  1. Education of the owners

It is one of the most important features of an audit report. It makes sure that the business owners get to know their business and take necessary steps to make sure that the business integrity is persevered all the times. Business owners should work closely with the internal as well as external auditors to make sure that they discover new horizons for their business and find routes that are necessary for the expansion. Making a professional relationship with the accounting firms also ensure that the best report is generated which is error free and in line with the laws and rules of the accounting.

  1. Limited issues and problems

The audit report limits the legal, tax and accounting issues for the business. If the report has been created internally then it is very important before the external audit is conducted. The internal audit report highlights all the issues that can affect the external audit and lead the business into trouble. The correct accounting and financial management information is something that is required by the business and it should be the main aim of the audit report.

ICAN or the Institute of Charted Accountants of Nigeria is the sole governing body which ensures that all the accounting and auditing standards are met in the organizations doing businesses in the country. When it comes to auditing the most important part is that of Audit report and for the same reason while teaching the students the ICAN makes sure that a combination of GAAP or generally accepted accounting standards as well as the standards that particularly prevail within the accounting industry are taught.

Reporting standards

Following are some of the reporting standards or requirements that an auditor needs to fulfill to make sure that the final audit report that is presented has no errors or omissions:

  1. The auditor needs to mention if the financial statements are in accordance with the Nigerian accounting standards. In certain cases the GAAP should also be followed and if this is the case it is also be mentioned in this report.
  2. If such principles are not observed in a well defined manner the auditor should also mention the special circumstances under which it was not possible.
  3. Audit report should also contain reasonable informative disclosures which should support the evidence that has been presented in the report. In case these disclosures are not sufficient the auditor should mention it within the report.

The financial scandals in the past have incurred huge losses to the Nigerian economy so within the country the auditors and the financial analysts are very high in demand and they remain bust throughout the year.

Audit report completion checklist

Before signing the final draft of the audit report the auditor needs to make sure that all relevant matters have been addressed. In the wake of advancement in science of technology different software programs are used in this regard when it comes to Nigeria which makes the process of filing report very easy. Formerly the manual records were also used to compile the checklist but it is not the case now as different accounting software programs have been developed to aid the auditors.

Reporting and debriefing

Once the audit report has been duly signed the auditor now needs to ensure that it is presented to all the stake holders within the management and board of director. Once done a debriefing session is also conducted by the auditor to explain all the matters and concerns that are raised in the report. This debriefing may also include proper training and development of the internal audit teams of the company. Issues that arise within the audit are also addressed so that in future they are eliminated in full to make the process smooth and carefree.

That said, the rules which are mentioned within the ICAN accounting and auditing principles are changed from time to time making sure that the latest and state of the art standards are followed within Nigeria.

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