explain the purpose and content of a statutory

Question

Explain the purpose and content of a statutory audit report. Explain what recommendations you would make to the case study business

Statuary and Non- Statuary audits

In most countries, audits are required under national statute in the case of large no. of undertakings, including the followings

 Undertakings                                                                             Principal Legislations

Limited Companies                                          The companies' ordinance 1984

Corporative societies                                       the societies Act 1927

Banking Companies                                         Banking Companies ordinance 1962

Modarbas                                                         The modarba Co. and Modarba flotation

                                                                        And control ordinance

Other organizations and entities requiring a statutory audit may include charities investment business, trade unions etc

Non-Statuary audits are performed by independent auditors because owner, proprietors

Members, trustees, professional- Governing bodies or other interested parties want them rather than because the law requires them auditors may also give an audit opinion on statements other that annual accounts including

1. Summaries of sales in support of statement of royalties
2. Statement of expenditure in supports of applications for govt. grant.
3. Circulation figures of a newspaper on magazine

 

In all such audits the auditors must take into account any regulations contained in the internal rules or constitution of the undertaking. E.g. of regulation which the auditors would need to refer to in such assignments would include.

1. Rules of clubs, societies and charities
2. Partnership agreements

In statuary audit auditor give two types of audit opinion in audit report.

Qualified Opinion

In which auditor is successful in finding evidences that supported that financial statements are materially miss tatted in this case auditor qualifies report.

 Unqualified Opinion

In this case auditor does not qualify report because he did not find any evidence and financial statements are fairly represented.

In this case study business auditor will give an unqualified opinion but he will classified weakness of interim of control and suggest the remedies in management latter. David and Linda will take notice of it if when auditor's opinion is going to be

1-  Affected in case recommendations are not followed.

2-  If recommendation are taken and benefits are higher that cost of it.

Auditor will give unqualified opinion; little mistakes will be cancelled without management and auditors dispute.