Most auditor’s reports are positive and with a statement expressing the auditors’ opinion that the financial statements show a true and fair view and comply with statutory requirements. However, some auditors express this opinion with reservations or express a conversed opinion.
Conditions that can lead to qualification of audit report.
- Where proper accounting records have not been kept
- Where books of account if kept, do not agree with the audit financial statements prepared by the management
- Where proper returns adequate for the purpose of the audit have not been received from branches not visited by the auditors.
- Where the information given in the directors reports is not consistent with information in the accounts.
- Where auditors are unable to obtain all the information and explanation required for the purpose of their audit.
- Where the management of the enterprise did not comply with relevant statutory and professional regulations in preparing the financial statements.
- Where there are significant departures form accounting standards.
- Where internal control system are not effective within the enterprises
- Where there is a doubt as to the going concern concept status of the company.