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Audit Report Format for NBFC

Priyanka Bajpayee
24 May, 2023 24 May, 2023
Audit-Report-Format-for-NBFC

The audit report of the company is a key deliverable which shows the end results of the entire audit process. The decisions and plans of the Investors, Lenders, Customers, and others who are also the users of the financial statement are based on the Audit reports of the Company. The Audit report is a written report from the Auditor of the Company which contains the opinion that whether a Company’s financial statement comply with GAAP (Generally Accepted Accounting Principal. In this article, we are going to discuss an audit report format for NBFC.

The auditor of the Company should be careful while issuing the Audit Report as there are a large number of people placing trust on the Audit Report and which helps them in taking decisions accordingly. The report should be issued by being unbiased and objective in discharging the functions.

Key Significance of the Audit Report for the NBFC

The Audit Report is not an analysis of the Company’s performance, but the report reflects a measure of the reliability of the Financial Statements[1]. The key significance of the Audit Report:

  • The auditor’s report is a document prepared by the Auditor which contains the auditor’s opinion of whether a company’s financial statements comply with GAAP or not.
  • The Investor of the company’s i.e. Banks, creditors, and also the regulators require an audit of a company’s financial statements.
  • An unqualified or clean audit report means a company has followed accounting standards while a qualified report or Unclean report means there might be errors in the Audit report as well as Compliances.
  • Additionally, an adverse report means that the financial statements might have discrepancies and errors and also the company didn’t adhere to GAAP.
READ  Accounting of Investments by NBFC

Read our article:Statutory Audit Checklist for NBFCs – Complete Overview

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Format of an Audit Report for NBFC

The basic format of an Audit report on auditing as prescribed by the Standards is as follows-

Heading Description
Title Title shall clearly mention that the report is an Independent Auditor’s Report.
Addressee Should mention clearly as to whom the report is being given. i.e. if the Members Mentions that it is the Management’s responsibility to prepare the Financial Statements, it should be clearly mentioned in the Audit report.
Report The report contains the details of the audit accompanied by the Financial statement which comprises of the Balance sheet, P&L and the Cash flow statement of the respective year and also the summary of the significant accounting policies.
Management’s Responsibility for Financial Statements Under MRFS, the management uses its best judgement to ensure that the statement reflects fairly the consolidated financial position, results of operations.
Auditor’s Responsibility Under Auditor’s Responsibility, it is required to mention that the responsibility of the Auditor is to express an unbiased opinion on the financial statements and issue an audit report.
Opinion The Auditor should mention the overall impression obtained from the audit of financial statements.
For example Modified Opinion, Unmodified Opinion.
Basis of the Opinion State the basis on which the opinion as reported has been formed. Facts of the basis should be clearly mentioned in the Audit report.
Reporting Responsibility other than above-mentioned key points In case of any other reporting responsibility exists, i.e. Report on Legal or Regulatory requirements the same should be mentioned in the Audit report.

Signature of the Auditor The Auditor of the Company shall sign the Audit Report.
Place of Sign by the Auditor The city in which the Audit Report is signed.
The date on which the Audit Report is signed The date on which the Audit Report is signed.
NBFC-Audit-Report-Format
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