Thursday, September 10, 2020

Baker Tilly Kuwait | financial audit companies

 


so in this lesson we're going to go over an introduction to audit reports we've alluded to these audit reports in all of our lessons and so I wanted to give you an intro to audit reports now there's a whole other section that's just devoted to audit reports so we won't go into much detail but I think it's important to understand it before going in to the rest of the lessons about auditing okay so we've got really four audit reports that we can use as auditors when we evaluate the results of an organization's financial statements and whether or not they are free from material misstatements okay the first one which is the most common one because most companies do follow the rules is called the unqualified opinion report now when I was a student I always got this confused because I saw on and I kept thinking that that means that they did something wrong but in auditing an unqualified report just basically means that it's free from material misstatements or it's not qualified we're not qualifying our our report or our opinion because of something that they did wrong so unqualified opinion says it's free from material misstatement so that's a clean opinion and we'll write that here it's a clean opinion now the next type of opinion can also be used it's called a qualified opinion now a qualified opinion says that the financial statements are fairly stated which means everything except for this one thing we're about to tell you is fairly stated so it's an unqualified opinion however because of this one thing we can't give it a clean opinion so financial statements are fairly stated except for bla bla bla okay whatever it is and usually if you're going to use a qualified opinion it's a small in nature kind of an issue that it doesn't warrant some big issue okay so that one part might not be fairly stated but everything else is and you should trust everything else but we want you to be aware with there's an issue here at management won't change it okay we'll talk about changing it after we talk about all of these four things okay the third one which you don't want is the adverse opinion so the adverse opinion basically says we as auditors have done all the work but based on the outcomes of it it's not fairly stated and shouldn't be relied on okay very rarely used but could be used because the client needs to be audited for a bank stat whatever and we go in and we try to do everything and we do everything and we looked at everything we said no you can't rely on it because it's not fairly stated in accordance with GAAP and that sometimes is the issue it's not done in GAAP it's done in some other way and they're just refusing to do it because there's just too much work involved so the adverse opinion is given so of these three we have the clean opinion the everything is clean except for this one thing and you know what you we've done our work we've looked at everything but it's not worth it don't rely on and it's not fairly staying okay the last one is something that we don't often see as well but we do have it and that's called the disclaimer now when do we use disclaimers we use disclaimers when we have insufficient evidence okay so we go in and we say we need access to X Y & Z and they say no and we say okay we need access to X Y & Z otherwise we can't give you an opinion no and there's no alternative procedures an alternative procedure says that maybe plan a we were going to do this to substantiate an assertion well they won't give us plan a so we're gonna go to plan B which would get us to the same answer for the management sessions and we can't do that so now we're out of roadblocks or sorry we're out of plans and so now we're at a roadblock we can't really tell everybody that everything's there so we're going to disclaim an opinion we're not gonna really give any opinion we're gonna say there is no opinion to give and it may be because we have insufficient evidence now I want to take this with a grain of salt you may have insufficient evidence but you can back it up with some other test 

 

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