Question
When an auditor is satisfied with the fairness of the
balance sheet and profit and loss account, which of the following audit report is submitted by him/her? Refer to the following information to answer the next 4 questions (Q17 to Q20) The word Audit is derived from Latin word āAudireā which means āto hearā. Auditing is the systematic examination of financial statements, records and related operations to determine adherence to generally accepted accounting principles, management policies and stated requirement. Importance of auditing can be judged from the fact that even those organizations which are not covered by Companies Act get their financial statements audited. It has become a necessity for every commercial and even non- commercial organization. A company appoints an auditor who submits his opinion on the truthfulness and fairness of the financial performance and position of the company. An auditorās Report is the format of result of all the effort that goes into the audit. Communicating the Auditorās findings to interested users is part of all audits. Thus, the Final phase of an Audit involves preparing that communication, which is known as auditorās report.Solution
Unqualified/ Clean/ Fair report: When an auditor is satisfied with the fairness of the balance sheet and profit and loss account, he will give a clean report. When the auditor makes various statutory affirmations without reservations, he is said to have the given an unqualified report on financial statements of the company.
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