Audit Report Format and Form

Audit is an independent examination of statutory books, books of accounts, documents, statutory records, vouchers etc. which shows that how financial statements or non-financial statements show true and fair view. It is an accurate review of the financial records of the company shows true and fair view.

Types of audit

Who can conduct audit

• Statutory Audit- By an independent Chartered Accountant who is the member of The Institute of Chartered Accountants of India.
• Internal Audit- Can be conducted by a Chartered Accountant or a Cost Accountant or any other profession decided by Board of Directors.
• Cost Audit- It is conducted by a Cost Accountant who is the member of The Institute of Cost and Management Accountants of India.
• Goods and Services Tax Audit- Chartered Accountant who is the member of The Institute of Chartered Accountants of India.
• Income tax Audit- Chartered Accountant who is the member of The Institute of Chartered Accountants of India.
• Secretarial Audit - Company Secretary who is the member of The Institute o the Company Secretaries of India.

Audit Report

It is a document that contains that the opinion of the auditor that whether the entity has complied with the applicable standards and is free from material misstatement.

Audit Opinion

Any remark given by an auditor while examining the statutory books financial statement and other records is known as audit opinion.

Types of audit opinion

Unqualified report:

• It is a clear report.
• Generally auditors give this type of report
• It does not contain any unfavorable remark.
• This report shows that the entity has complied with all the accounting standards, have practiced good governance and also complied with applicable law.

Qualified report:

• It is not a clear report
• This report shows that the financial statement contains material miss statement.
• This report may be said as a sign of caution
• The auditors are also required to give a brief on why he/she has given such report.

Disclaimer report:

• This remark is given when the auditor has not been able to conduct the audit freely
• This situation arises when the entity does not give free access to the financial records to the auditor
• Also when the auditor doesn’t gets satisfactory answers on any of their questions or query from the entity
• This report shows that the company has not provided the auditor the relevant information so that an independent and smooth audit can be conducted

Adverse report:

• This report shows all the gross misstatement or potential frauds.
• The financial records do not show true and fair view.
• This type of report is a red flag.
• This report is detrimental to company’s reputation and goodwill.

Forms for Audit Report

Several forms have been prescribed for the audits which are to be mandatorily conducted under various Acts.

Thresholds for mandatory Audit:

Statutory Audit- It is compulsory for all the companies irrespective of the Turnover.

Internal Audit- Following are the companies required for mandatory for internal audit:- 

1. All public companies shall undergo internal audit
2. Unlisted public company whose:

• Annual Turnover = Minimum Two Hundred crore.
• Paid up share capital = Minimum Four Hundred crore.
• Outstanding deposit = Minimum Twenty Five crore.
• Borrowings from banks and public financial     Institutions = Minimum One Hundred Crore.

3. Private company having Annual Turnover = Minimum Two Hundred Crore.
4. Every company having Outstanding Borrowings from banks and public financial Institutions = Minimum One Hundred crore in a financial year.

GST Audit- Any entity having annual turnover of minimum Two Hundred Crore.

Secretarial Audit- Following are the companies required for mandatory for Secretarial audit:-

1. Every listed company

2. Public company having:

• Paid up share capital-Minimum Fifty Crore
• Annual turnover- Minimum Two Hundred Crore

3. Every company having outstanding Borrowings from banks and public financial Institutions = Minimum One Hundred crore in a financial year.

Cost Audit- - Following are the companies required for mandatory for Cost audit:-

• Company specified in item A of Rule 3 shall audit there cost record if annual turnover during the immediately preceding financial year is rupees fifty crore and more. Individual turnover Twenty Five crore or more.
• Company specified in item B of Rule 3 shall audit there cost record if annual turnover during the immediately preceding financial year is rupees One Hundred crore and more. Individual turnover Thirty Five crore or more.

Income Tax Audit - Following are the businesses required for mandatory for Income Tax Audit:-

• One crore for businesses with more than 5% cash transaction and 
• Ten crore of business with less than 5% cash transaction.

Assesses opting for presumptive taxation scheme under section 44AD and section 44ADA are not required to conduct audit of their books.

Brief takeaways for Presumptive Tax scheme:

Contents of an Audit Form

Audit forms includes the sections which shall be filled by an auditor who have collected the information by conducting the audit. Content of the form may vary depending upon the various types of audit.

Some of the common contents of the audit report are as follows:

• Details of audit

Date on which audit is conducted.

Name and details of the auditor along with his/her contact details.

Name of the department for which audit is being conducted along with its location.

• Objective of conducting audit

This section specifies why audit is being conducted of the entity or its department.

• Scope of audit

This section specifies what is the area of audit and boundaries of conducting the audit.

• Criteria

This section specifies that what acts rule regulations are being checked during the audit which are applicable to the entity.

• Checklist

This section specifies the specific questions which are assessed during the audit and also it specifies the rating scale which contains two options i.e. yes / No for each item.

• Evidences and documentation

This section contains attachments for attachments records documents and records.

• Plan of action

This section mentions the actions needed to address the findings

• Conclusion

This section contains overall assessments or conclusion of audit.

• Signature

It contains the signature of the auditor and auditee to confirm the accuracy of audit report.

• Appendix

Additional information or reference material.

Why seedup 

Initiate your secretarial audit application with SeedUp.

1. Free Consultation: Our professionals will provide you a 15 minutes free consultation on the regulatory aspects and case to case basis consultation depending upon the business conditions of the enterprise.
2. Price: We provide the best price in this perfect competitive market across India along with enriching client experience.
3. Documents Collection: A complete list of documents required to complete the task shall be provided by us at once to eliminate the hassle for documents.
4. Documents Preparation: The drafting and reply to be made to MCA and other regulatory bodies shall be made by us which is best among the industry.
5. End to End Support: We provide end to end support to our client’s right form start of the project till the completion of the task.
6. To know more please click here to consult our experts 

Our Procedure for Secretarial Audit.

1. Fill the form to get in touch with us and get to know more about the expert consultation
2. Documents collection: Our team will get in touch and help you regarding the whole documentation process.
3. Guidance: Proper guidance and support will be given from us through the entire secretarial audit process.
4. Audit update: Timely updates shall be given on completion of various stages of the entire secretarial audit process.