Companies at the end of their fiscal year perform many assessments and reviews to analyze their performance for the year. As such, to record the performance review of not only the employees but also its financials it needs to note down i.e. create documents for record keeping. These steps are taken to provide stakeholders with information about the company, its strategy, financials, and operations. One such step that is essential is called auditing. Auditing is done to strictly identify any discrepancies in the company procedures and scrutinize whether the company policies are being followed. It can be carried out by external auditors and internal auditors. After completing their audit a report is produced to report any observations by the auditors. This report is called Annual Audit Report.
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Writing an Annual Report:
In order to write an annual audit report, the auditors have to write factual statements instead of opinionated statements to demonstrate a clear and true picture. But first, in this report, auditors commence with an introductory paragraph that briefly introduces the reader to the audit and its importance. This is usually done to provide background information to the audience of the report mainly shareholders. It should be noted that prior to the introduction the names of the auditors are listed who carried out the audit in conjunction with the audit company that has rendered its service.
When we progress further with the report the auditors signify the purpose of the audit as well as the report. Some of the other miscellaneous areas covered in this phase are the year for which the audit was carried out, a detailed description of the audit procedure, and the area covered on management controls as well as weaknesses found.
Further, in the Annual Audit Report, any findings or observations found during the audit are reported through graph displays and charts. This is then layered down into descriptions that describe what the graphics mean whilst keeping the reader’s background in mind. All this information is mostly summarized to keep the report concise and meaningful.
Most importantly, as required by most reports, consistency, and engaging content make the report easy to read and comprehend. The Annual Audit Report is prepared in collaboration with the management therefore it is possible that an audit report may not represent or provide a completely honest picture. It, however, gives an insight into the management controls and any discrepancies found in them. Additionally, Annual Audit Report may have an effect on the concerned company’s strategic decisions and business operations if the shareholders are not satisfied with the auditor’s recommendations at the end of the report. Hence the report should not only be written in compliance with the audit standards but should be prepared with management’s full cooperation.
In the latter part of the Annual Audit Report, the auditors present their conclusions and any difficulties they faced while auditing. How this audit information will be distributed is discussed after recommendations and then an audit tool or questionnaire is attached at the end to further clarify any queries.
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