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When is a Audit report necessary ?

Mukeshh Agarwal (E-solutions) (129 Points)

16 March 2009

HelloFrenz,

Can any one ellobrate , when a Audit report is necessary & wat crietria or amount is necessary

1. partnership firm

2. properitorship firm

3. companies - Pvt & Public Ltd

4. Individual

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3 Replies

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 19 March 2009

Hi,

Kindly elaborate your q.

Audit Report is required under companies act and it is provided by statutory auditor appointed by shareholders of the company.

Audit report is generated by auditor at the final audit of the company. It must be approved by the board of directors along with balance sheet. After that it is provided to shareholders along with BS.

Under company law audit of partnership or propritory firm is not mandatory. Regards

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CA CS CIMA Prakash Somani (Landmark Group) (23502 Points)
Replied 19 March 2009

An audit report is the only output of the Auditors work, which people outside the Audit function get to see. It is a formal document summarizing the work done and reports the findings and recommendations. It is a means of communicating all of the auditor's work to management. The report must concisely present the total essence of the audit effort. Findings must be supported by sufficient evidence and be within the audit's scope and objectives. Each recommendation must fit the facts of the finding and materially reduce the potential risk as indicated by the facts of the finding. Each finding must be provable. It is not important what an auditor believes; the important thing is what the auditor can prove. Auditor beliefs, without proper documentation will not be carried to the report.

Whether audit report is a formally written document or an informal one it should have the following information:

Disclose findings: The report should present the findings both favourable and unfavourable in a concise manner so that the management can be apprised of the situation in an operation or segment.

Descripttion of findings: Adverse findings should be described in detail. It could be internal control weakness or gaps or violations of procedures or any other audit concern.

Suggestions and Recommendations: the auditor should make some suggestions for prevention or correction of the deficiencies or gaps.

Documentation of plans and Views of auditee: The auditee may wish to provide clarifications on any of the issues reported or state the constraints or mitigating circumstances.

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nishant dhiman (accountant) (21 Points)
Replied 11 May 2010

hello sir,

tell me audit is necessary on lic commision up to 1000000/-(ten lacs) if audit is necessary tell me the form no. of audit report the assesse is individual