Distinguish between Audit report and certificate

Auditing and Assurance Revision Questions and Answers

Audit Report and Certificate
i. The term „report‟ is used where an expression of opinion is involved. The term „certificate‟ is preferable where the auditor comments on or verifies facts
ii. The Auditor Report is based on facts, estimates and assumptions whereas Auditor’s Certificate is based on actual facts

iii. Auditor Report is not a guarantee of the absolute correctness & accuracy of the books of accounts. But the auditor certificate serves as a guarantee of the absolute correctness & accuracy of the books of accounts
iv. If the Auditor Report is later on found to be wrong, he cannot be held responsible since he has given merely his opinion on the state of affairs of the company. But if the duly signed certificate is found as wrong, he will be held responsible

Basis Audit Report Audit Certificate
Meaning An Audit Report is an expression o opinion on the true and fair vie presented by financial statements Certificate is a written confirmation w of the accuracy of the fact  state therein and does not involve an

estimate of opinion.

Utility The term audit report is used when the auditor expresses his opinion on the financial statements The term certificate is used when the auditor verifies certain exact fact e.g. Royalty payment made t foreign collaborators, value o import/exports of a company during a financial year.
Implication Audit report implies that the auditor

– Has examined relevant records i accordance with generally accepted auditing standards; and

– Is expressing an opinion whether o not the financial statement representing a true and fair view o the state of affairs and of the working results of the enterprise.

A    certificate    implies     that    the Auditor

–    Has verified certain precis figures; and

–    Is in a position to vouch their accuracy as per the examination o documents and books of account produced before him.

Accuracy The Auditor is responsible for ensuring that the report is based on factual date that his opinion is in accordance wit facts, and that it is arrived at b application of due care & Skill. The Auditor is responsible for the factual accuracy of what is state therein.


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