An auditor's report is a written letter from the auditor containing their opinion on whether a company's financial statements comply with generally accepted accounting principles GAAP and are free from material misstatement. The independent and external audit report is typically published with the company's annual report. The auditor's report is important because banks and creditors require an audit of a company's financial statements before lending to them. An auditor's report is a written letter attached to a company's financial statements that expresses its opinion on a company's compliance with standard accounting practices. The auditor's report is required to be filed with a public company's financial statements when reporting earnings to the Securities and Exchange Commission SEC. However, an auditor's report is not an evaluation of whether a company is a good investment.
Events may occur between the end of the reporting period and the date when financial statements are authorized for an issue that may present information that should be considered in the preparation of financial statements. IAS 10 Events after the Reporting Period guides as to which events should lead to adjustments in the financial statements and which events shall be disclosed in the notes to financial statements. Events after the balance sheet date are the events, which could be favorable or unfavorable, that occur between the end of the reporting period and the date that the financial statements are authorized for issue. Adjusting events are those events that provide further evidence about conditions that existed at the end of the reporting period.
An auditor's opinion is a certification that accompanies financial statements. It is based on an audit of the procedures and records used to produce the statements and delivers an opinion as to whether material misstatements exist in the financial statements. An auditor's opinion may also be called an accountant's opinion. The audit report begins with an introductory section outlining the responsibility of management and the responsibility of the audit firm. The second section identifies the financial statements on which the auditor's opinion is given.
Audit Committee Charter. In fulfilling its purpose, the Committee shall review: a the financial reports and other financial information of the Company; b the Company's systems of internal controls and procedures and disclosure controls and procedures; and c the Company's auditing, accounting and financial reporting processes generally. Consistent with this purpose, the Committee should encourage continuous improvement of, and should foster adherence to, the Company's policies, procedures and practices at all levels. In fulfilling their responsibilities hereunder, it is recognized that members of the Committee are not employees of the Company and do not bear any of the responsibilities of management and the Company's independent auditors.