It has often been said that the auditors‘ report is the formal result of all his efforts. This being the case, it is very important that the reader well understands the meaning of the Audit Report, particularly where the auditor wishes to qualify his opinion on the financial statements; b) Explain how the international standards on auditing attempt to ensure that the report of the auditors is clearly understood

The ISA attempt to ensure that the report of the auditors is clearly understood by giving guidelines to auditors as to how the report should be constructed and what details it should contain. This supplements the requirements of the companies Act and ensures that the audit report is well understood by the users of the audited financial statements.

For example it requires auditors to: –

i) Identify the financial statements to which the report covers.

ii) Describe the scope of an audit as having been conducted in accordance with ISA‘s or relevant national standards.

iii) A statement describing the audit as including:-

• Examining on a test basis evidence to support the financial statement amounts and disclosures
  assessing the accounting principles used in the preparation of the financial statements
• Assessing the significant estimates made by management in the preparation of the financial statements
• Evaluating the overall financial statement and also that the audit provides a reasonable basis for the opinion.

iv) A paragraph educating the users of the report on the responsibilities of the auditor and the directors responsibility regarding the financial statements.