Answer to Question #209656 in Accounting for Yuki

Question

Give an example of a qualified audit report.

Answer 1

Solution:

A qualified audit report refers to an audit report that an auditor furnishes particular discrepancies in the financial statements prepared by the company being audited. These discrepancies are normally known as qualifications. A qualified report, therefore, provides a qualified opinion on the true and fair view of the financial position as reported in the financial statements. The qualified opinion may cover one or various aspects of financial reporting.

Some of the issues that can result to the provision of a qualified report include omission of some accounting standards and rules by a company when preparing its books and formulating financial statements, the failure by the auditors to collect enough audit evidence to sufficiently verify all features and details of the financial statements and insufficient disclosures made in the financial statements.

 

An example of a qualified opinion is as follows:

The firm’s stocks are recorded at cost in the balance sheet. However, stocks have not been reported at the lower of cost and net realizable value as per the provisions of IFRS requirements.

In our opinion and to the best of our ability according to the information and explanations provided to us, excluding the effect of the above-mentioned qualified opinion, the financial statements display a true and fair view in conformity with the accounting rules and principles.