An independent auditor’s report is an official opinion from an independent auditor regarding a company’s financial statements. If you must undergo a financial statement audit, your stakeholders and financial institutions, such as your loan office, will likely request a copy of your auditor’s report.
In this post, we’ll explain what’s included in an independent auditor’s report and discuss the four types of audit opinions you might see reflected in it.
What is Included in an Independent Auditor’s Report?
An audit report contains information that helps express an auditor’s opinion. It includes crucial sections to help make the opinion easier to understand.
Those sections include:
- Title
- Addressee
- An opinion
- The basis for the opinion
- Relevant key audit matters
- Statement of management’s responsibilities and the governance of the statements
- Statement of the auditor’s responsibilities
- Auditor’s and engaging party’s signatures
- Date
AICPA-registered auditors express their opinions using a standard template. This template helps maintain a quality standard between firms and organizes information, making it easy to understand.
The Four Types of Audit Opinions
In truth, your audit is only as good as the accuracy of the financial statements you provide your auditor. That said, depending on the completeness and accuracy of your financial statements, you might see one of four audit opinion types attached to your final report.
It’s helpful to understand the meaning of the four audit opinions. They are:
- Unqualified: This type of audit report means there are no errors or mistakes in your financial statements or internal controls. In other words, it’s a clean audit report without commentary from your auditor.
- Qualified: A qualified opinion reflects an audit that contains one or two mistakes. This means your auditor has found something wrong within your financial statements or internal controls that are within your power to fix quickly.
- Adverse: If you’re given an adverse opinion, your auditor has found many issues and cannot verify your statements.
- Disclaimer of opinion: This opinion means you did not provide your independent auditor with enough information for them to conduct their audit.
Your independent auditor’s opinion will help stakeholders understand your company’s financial position and processes. This opinion is necessary, especially when stakeholders consider funding opportunities or investments with your company.
The Benefit of an Independent Auditor’s Report for Private Companies
Even though you may have an accountant on your team who is qualified and certified to conduct audits, you need to work with an independent audit firm. Independent auditors, or auditors who have no ties to your company, help provide transparency and build trust.
Because they work outside your organization, your stakeholders trust their opinions and understand that a negative or positive opinion does not affect the auditing firm in any way. Lending institutions are more likely to view independent auditor’s reports in the same favorable light.
Why Choose Assurance Dimensions?
An independent auditor’s report contains crucial information regarding your financial statements and internal controls. Working with an independent auditor ensures you’re providing your stakeholders with an unbiased review of your statements.
At Assurance Dimensions, we have over 75 years of unbiased experience. Our dedicated professional team is AIPCA-certified and ready to help conduct your audit. Contact us today to learn more about our private company audits, assurance, and advisory services.