COMPONENTS OF INTERNAL

AUDIT REPORT
GROUP 4:
Presenters:
Ang, Pauline Grace A.
Cantre, Marnie C.
Cattiling, Hillary Jo Allison
Guerrero, Kimberly Ann L.
Jarata, Queen Nicole T.
Mengorio, Leanna May C.
Professor:
Marie Antonette A. Bobon, CPA, MBA

Objectives:
What is Auditing?
What are the Kinds of Auditing and its differences?
What is an Internal Audit Report?
What are the Components of Internal Audit Report?
What are the different Types of Opinion an auditor
can issue?
What are the reasons for modifications of
conclusion?

Auditing
- Accumulation and evaluation
of evidence about information

Internal Audit
- Independent, Accuracy,
Consulting Activity
- Reported to BOD and
Senior Management

External Audit
- Independent examination
of FS
- Reported to owners of
the company

Internal Audit
Report

External Audit
Report

Importance: detecting
and preventing fraud,
testing internal control,
and monitoring
compliance with
company policy and
government regulation

Importance: create
transparency and
enhance a companys
public image,
examine company
records and operations

Internal Audit
Report

Formal Report
- Significant results
pertinent for
immediate sharing
w/ owner

Interim Report
- Summary of the
procedures and
techniques used for
completing the
audit

ELEMENTS OF INTERNAL AUDIT

REPORT
Report Title
Introductory Paragraph
Scope Paragraph
Executive Summary
Opinion Paragraph
Auditors Name
Auditors Signature

DISTINCT PART OF INTERNAL AUDIT

REPORT (PRIVATE COMPANY)

Introduction
Body
Review

PUBLIC
SECTOR

PRIVATE
SECTOR

- under the control of

government(central or
state or local)

- owned and controlled

by private individuals
or companies

Objective: To serve
the citizens of the
country

Objective: to earn
profit

Areas: Transport,
Agriculture, Insurance,
etc.

Areas: Manufacturing,
Construction,
Pharmaceuticals etc.

AUDITORS STANDARD REPORT:

Non- Public
Client
-Title includes word
independent
- Addressed to whoever
retained the auditors
- Signed with name of
CPA firm
- Dated last day of
fieldwork or date on
obtained sufficient
appropriate audit evidence

Public Client
- Title includes the
words Registered
and Independent
- Includes the city and
state where the
auditors report has
been issued.
- Additional report on
the clients internal
control over financial
reporting

THE AICPA STANDARD

AUDITORS REPORT
Introductory Paragraph
Scope Paragraph
Opinion Paragraph

TYPES OF OPINIONS
1. Unqualified Opinion/Clean Opinion has no
reservations; standard report; fairly presented with GAAP
2. Qualified Opinion with reservations; some are not
fairly presented with GAAP
3. Adverse Opinion - not presented fairly with GAAP
4. Disclaimer Opinion - unable to form an opinion; no
opinion

5 circumstances when an unqualified report with an

emphasis- of- matter explanatory paragraph or
modified wording is appropriate:
Lack of consistent application of GAAP
Substantial doubt about going concern
Auditor agrees with a departure from promulgated
accounting principles
Emphasis of other matters
Reports involving other auditors

SUMMARY OF REASONS FOR

MODIFICATION OF CONCLUSION

Effect
Scope
Limitation

Material

Material and
Pervasive
Misstateme
Material
nt
Material and
Pervasive

Type of
conclusion
Qualified
Disclaimer
Qualified
Adverse

References:
https://na.theiia.org/training/courses/Pages/Audit-Report-Writing.aspx
http://www.icpak.com/wp-content/uploads/2015/09/Internal-AuditReporting-Writing
http://smallbusiness.chron.com/4-types-audit-reports-3794.html
http://www.investopedia.com/terms/a/auditors-opinion.asp
https://www.iia.org.au/aboutIIA/definitionOfIA.aspx
http://keydifferences.com/difference-between-public-sector-and-privatesector.html
Auditing and Assurance Services (15th Edition) by A. Arens, R. Elder
and M. Beasley