What is an Audit Report?

In finance, an audit report, also referred to as an evaluation report in the United Kingdom, is a summary or document generally submitted by either an external independent auditor or internal audit officer. It contains the findings of an audit done on the financial records or accounts of a company. This report is a significant tool used in evaluating whether quality standards are met by the company.

Most audit reports contain the analytical and systematic review, assessment, and recommendations made by the auditor on the business matter. An audit report is commonly performed on the financial aspect of the business as well as on the performance of the company's management. It may also be done on a section, division, department, or on the entire business itself.

A financial audit report is commonly known to the public as it involves the monetary aspect of the company. It is reflected in books that integrate the balance sheet, income statement, equity, and other financial papers along with the auditor’s review. Stakeholders are the primary set of users of this audit report for they are directly involved in the corporate body. The government is another interested party in this affair because of the rightful taxes due for collection. There are some other concerned parties such as affiliates, competitors, and investors that would also consider it useful.

Equally important is the performance audit report, which could present how effective and efficient the company is at handling resources available to them. This is often done through examination of the operation, programs, and system employed by the management. The audit is usually done by an external audit officer, although some companies may be audited by an internal auditor who is employed in the company.

An audit report may be conducted on an entire strategic business unit (SBU). This further requires an extensive, but detailed inquiry into its overall operations. An SBU is a self-earning and self-operating entity, which often requires thorough audit. Audit reporting may also be conducted in specific subdivision such as the procurement section, which is responsible for the acquisition of several services and goods needed by the company.