An audit report is a written opinion of an auditor regarding an entity’s financial statements. The report is written in a standard format, as mandated by generally accepted auditing standards (GAAS). GAAS requires or allows certain variations in the report, depending upon the circumstances of the audit work in which the auditor engages. The following report variations may be used:
A clean opinion, if the financial statements are a fair representation of an entity’s financial position, being free of material misstatements. This is also known as an unqualified opinion.
A qualified opinion, if any scope limitations were imposed upon the auditor’s work.
An adverse opinion, if the financial statements were materially misstated.
A disclaimer of opinion, which can be triggered by several situations. For example, the auditor may not be independent, or there is a going concern issue with the auditee.
The typical audit report contains three paragraphs, which cover the following topics:
The responsibilities of the auditor and the management of the entity.
The scope of the audit.
The auditor’s opinion of the entity’s financial statements.
An audit report is issued to the user of an entity’s financial statements. The user may rely upon the report as evidence that a knowledgeable third party has investigated and rendered an opinion on the financial statements. An audit report that contains a clean opinion is required by many lenders before they will loan funds to a business. It is also necessary for a publicly-held entity to attach the relevant audit report to its financial statements before filing them with the Securities and Exchange Commission.
compliances which a private limited company has to mandatorily ensure:
Appointment of Auditor– Auditor will be appointed for the 5 (Five) years and form ADT-1 will be filed for a 5-year appointment. The first Auditor will be appointed within one month from the date of incorporation of the Company.
Statutory Audit of Accounts– Every Company shall prepare its Accounts and get the same audited by a Chartered Accountant at the end of the Financial Year compulsorily. The Auditor shall provide an Audit Report and the Audited Financial Statements to file it with the Registrar.
Filing of Annual Return (Form MGT-7)– Every Private Limited Company is required to file its Annual Return within 60 days of holding of Annual General Meeting. Annual Return will be for the period 1st April to 31st March.
Filing of Financial Statements (Form AOC-4)– Every Private Limited Company is required to file its Balance Sheet along with a statement of Profit and Loss Account and Director Report in this form within 30 days of holding of Annual General Meeting.
Holding Annual General Meeting- Every Private Limited Company Company must hold It is mandatory for every Private Limited Company Company to hold an AGM in every Calendar Year. Companies are required to hold their AGM within a period of six months, from the date of closing of the Financial Year.
Preparation of Directors’ Report– Directors’ Report will be prepared with a mention of all the information required under Section 134.
MANDATORY FILLINGS FOR AN LLP –
Following is the extract from the mandatory compliances by LLP are:
1. Form 8 – Form 8 is required to be filed on Annual basis for which due date is 30 th October of the successive financial year.
This Form requires Balance Sheet and the MSME Disclosure document which reflects that is there any pending interest or amount to be given to MSMEs, and required as mandatory attachments to Form 8 and discloses statements of accounts and position
2. Form 11 – Form 11 is the Annual return to be filed by the LLP wherein details of Designated partners/ partners their nominee changes are to be shown and other relevant details with regard to compounding and penalties.
The due date for filing Form 11 is 30th May after closing of every Financial Year.
3. Form 4 – Form 4 is formed for notifying any change in name/ address/designation of a designated partner or partner in the form of appointment, cessation, and change. Also, for giving consent to become a partner/designated partner. This form needs to be filed within 30 days of such change.
4. Form 15 – This form needs to be filed by the LLP when there is a change with regard to the place of the registered address. This form needs to be mandatorily filed with supporting documents within the relevant period.