Info 1: audit report definition
Info 2: how audit report works
Info 3: audit reports vs business reports
Info 4: example of audit report
Opening information:
The audit report sentence breaks into two words audit and report, audit means a review of accounts works, and reports means news. An audit report is an accounting report of one business.
So now let’s have a look at what is an audit report, how an audit report works in the public market among Corporations, and what is the difference between audit reports and business reports, finally one clear example of audit reports.
Info 1: audit report definition
Mr.Nekil is a businessperson, who runs the note and book paper production Industry. They have been in the market for almost 12 years and Nekil holds about 34 percent of the Ownership in their company.
However, his business files its financial statement of the income, balance sheet, and cash flow to all stakeholders. Mr.Nekil also wrote a letter to all the business Shareholders.
Where last year he mentioned to all the employees that salary was increased 2.5 percent to their employees through email.
Here the reports that take place to Shareholders as financial statements of the company are what are named audit reports.
When any of the businesses file the financial statement of income, assets, and class flow to their owners and agency’s is what is called an audit report of the certain company.
Suspect if the filed report is occupied with any other matters other than without includable of a financial statement then it’s not known to be an audit report.
This same concept would be applied to all the public Corporations, so let’s dive into how the audit reports are involved in the public market.
Info 2: how audit report works
Audit reports don’t represent any of the specific objects or things, instead, they are accounted data that are collected to report information from one firm to the other by using maths.
For this reason, all the audit reports use math because other than a letter and data of whole business profiles would lie or fake, but the number won’t be able to be created as fake and untrue.
Because each accounting term is only able to be built with full evidence and proof, which leads to telling the truth in accounts reports even one public Industry fakes wrong information or hides something.
Supposedly if the audit report is fake and created by the number with wrong proof or no proof, the members who are involved in the activities of cheating would lead to savior punishment and jail.
Because audit reports are one of Investors and big institutions are very important matters to determine whether such a company by doing well or not.
These financial reports of the company are what influenced the Investor’s decision very highly.
However, these audit reports are built in three types of simple processes with distinct purposes in the public market.
One report is built based on the function of tracking, recording, and reporting the amount of the whole Industry income and expenses to notify what is the business’s true income.
Next reports depend on how much the certain company holds in assets and how it manages its liabilities, then what the real value of the equity of that business.
And final report is the cash flow of one statement constructed in a way to demonstrate the cash in and cash out of the business bank account and remains the end of the balance of each year inside the company.
All the reports are named with different names but are accounted for with proof. So they are illustrated as an audit report.
Most people are confused about the audit reports and business reports, so let’s jump into the key differences anyway.
Info 3: audit report vs business reports
The difference between the audit report and business reports is, that audit reports are the one which refers to the accounting news of one Industry, which shows the income and loss of one company.
On the other side, a business report means any kind of news released from one organization including accounting reports is considered a business report.
So the key difference between audit reports and business reports is audit reports are part of the business reports. To make you more clear about the audit reports let’s look into one brief example below.
Info 4: example of audit report
Say company F is the one which released the two kinds of reports in the current year. Where one report is the balance sheet of the company and another report is a Shares holder letter.
Here the two reports are the business reports, but the balance sheet alone is what is named as an audit report of company F.