The audit report is a part of a standard company’s annual report. It contains an official opinion given by an independent certified public accountant (which makes that person sound like the most important person who’s ever lived) at the end of an audited financial statement. In it, the famed auditor talks about how they have examined the client’s financial statements for the year in accordance with GAAS (no, this does not mean farts – it stands for Generally Accepted Auditing Standards) or the PCAOB (which doesn’t sound like farts either and stands for Public Company Accounting Oversight Board). The whole point of the report is for the auditor to declare whether they think the company in question has fairly represented its position its financial statements. Basically, are these guys a bunch of liars who need to be investigated or do they seem legit?
The report consists of three pretty straightforward paragraphs. These guys are auditors, not Shakespeareans. The first paragraph talks about the responsibilities of the auditor and the directors. The second talks about the scope indicating the accounting principles that were used as a guide while creating the report. The third paragraph is where the actual opinion of the auditor is stated.
I wanted to send my auditor a basket of muffins but I was worried that would seem like I was trying to sway their opinion on our upcoming audit report.