The Audit Report response should be a thorough written reflection on your comparison of an actual business report (Audit Report) to the material covered in Chapter 13.
Read the Outline for an Audit Report and closely follow the provided instructions.
*I WILL HAVE THIS BELOW AND THE INTERVIEW WILL BE LINKED*
After listening to the Interview with Lori Herrick, include your response to the following questions in your audit report:
1. Is the Audit report a formal or informal proposal? Why?
2. In what ways do formal and informal reports differ?
3. What should be included in the introduction to a formal report? Can you provide an example from the audit reports that were provided?
4. What should the writer strive to do in the body of the formal report?
5. An important piece of writing any business report, letter, or any other form of communication is to know the audience you are writing to. After reading the audit reports and listening to the interview who is the intended audience? Why?
Use APA or MLA style and use headings.
You must use 2 outside sources (articles, for example) and you must cite them (using APA or MLA style) throughout your report, besides our book. You must cite our book at least twice in your report.
*THE BOOK WE ARE USING IS CALLED Business Communication: Process & Product
By: Mary Ellen Guffey; Dana Loewy. WHEN YOU CITE THE BOOK PLEASE CITE FROM CHAPTER 13*
OUTLINE FOR AUDIT REPORT:
➢ Audit Reports are NOT just another business letter
o They sum up the audit process and opinion in one place
o They are specifically designed to meet the New Clarity Standards
➢ Paragraph 1 – Summarizes the report information
o Accompanying Financial Statements of ABC Organization
o Financial Statements Presented – Statement of Financial Position, as of June 5, 201X, and related statements of activities, functional expenses, and cash flows for the year then ended, and related notes to the financial statements
▪ Must include appropriate wording for combined or consolidated financial statements.
▪ Must also cover all years presented in the financial statements, i.e. comparative statements.
➢ Paragraph 2 – Managements Responsibility for Financial Statements (this heading must be there according to clarified standards)
o Paragraph has been modified to clearly reflect management’s responsibility to monitor controls for fair presentation of FS free of material misstatement whether or not due to fraud or error.
▪ Mgmt must realize that these are THEIR financial statements and they must accept full responsibility for everything in them. They are not just the auditor’s financial statements, even if prepared by the auditor. Mgmt is required to sign a representation letter at the end of the audit taking responsibility for these financial statements and much more.
➢ Paragraphs 3, 4 & 5 – Auditors Responsibility (this heading must be there)
o Clarifies that the auditor’s responsibility is to express an opinion on the financial statements
▪ What standards we utilize to perform our procedures
▪ The procedures/process utilized to achieve the opinion
▪ Disclaimer of opinion over internal controls
▪ Statement evidence has been obtained to support our opinion
➢ Paragraph 6 – Opinion (this heading must be there)
o States the auditors opinion that the financial statements are fairly presented, in all material respects in accordance with GAAP.
▪ If the financial statements are not in accordance with GAAP, there may be an adverse opinion if a significant departure and an additional paragraph preceding the opinion
▪ If financial statements are on the cash basis, the opinion paragraph would state “in accordance with the cash basis of accounting as described in Note X”, and the basis of accounting would be described in additional paragraph following the opinion.
➢ Paragraph 7 –
o This will vary depending upon the engagement!
o A separate paragraph is needed for a Report on Summarized Comparative Information etc.
➢ Paragraph 7 or 8+ – Other Matters (This heading must be there)
o Other matters includes a separate paragraph identifying supplemental information such as the schedule of functional expenses, the procedures utilized for these schedules and if we are stating an opinion on these schedules
o “Other information” – Would pertain to the schedule of expenditures of federal and state awards, the procedures applied to these schedules and if we are stating an opinion on those schedules.
o “Emphasis of a Matter” – Would be if additional concerns such as a going concern were identified during our audit and we believe that it would affect the readers ability to understand the financial data and big picture for the organization.
In this folder you will find the following documents that you will need as you listen to the interview and complete your written response. *EVERYTHING IN THIS FOLDER WILL BE LINKED*
1. AICPA Guide to Clarity
2. Appendix 13A-3 Standard Report on Supplementary Information
3. Appendix 13A-5 Standard Report on Financial Statements
4. Appendix 13A-7 Standard Report on Comparative Financial Statements with Prior Year Summarized Information
5. Appendix 13B-5 Report Modification Because of an Uncertainty
THE ORDER TO WATCH THE VIDEOS IN –
FIRST -13 MINUTE ONE
SECOND – 3 MINUTE ONE
THIRD – 5 MINUTE ONE
