PARAGRAPH EXERCISE

Preparing The Auditor's Report

An auditor's report is provides an opinion of the validity and reliability of a company or organization’s financial statements. When financial statements are finalized, they usually must contain an evaluation – an auditor's report - from an accountant or auditor. The goal of an auditor's report is ultimately to document reasonable assurance that a company’s financial statements are free from material error.

An audit of a company’s financial statements should result in a report where the accountant or auditor is free to share their opinion about the validity and reliability of a company’s financial statements. In this report, the auditor should give a true picture of the company and their financial statements. The auditor should also state their connection with the financial statements, and whether they are externally or internally connected to the company.

In their report, the auditor can also share any reservations or additional information. Reservations could arise if the auditor disagrees something within the financial statements, e.g. if the auditor disagrees with management about the valuation of an asset and they believe that this has a significant impact on the of financial statements.

1.      What is the text about?

a. Preparing the Journal Ledger

b. Preparing  Income Statement

c. Collect the Testimony Transactions

d. Preparing the Auditor's Report

2.      What is the main idea of  the paragraph 2?

a. The auditor should give a true picture of their financial statements

b. The auditor can also share any reservations or additional information

c. How to make a good report

d. Analyze the transaction receipt

3.      The word ‘their’ in paragraph 3 is meaning to?

a. Acountant

b. Directur

c. Auditor

d. Company

4.      The word ‘they’ in paragraph 1 is meaning to?

a. Financial Statements

b. Balance Sheet

c. Auditor Report

d. Management Audit

5.      What should the auditor do with their report?

a. Should result in a report where the accountant or auditor is free to share their opinion

b. The audit report evaluates the validity and reliability of a company or organization’s financial statements

c. They should give a true picture of the company and their financial statements

d. They usually must contain an evaluation – an auditor's report - from an accountant or auditor

6.      Who is the person who makes a report on a company’s financial?

a. Manager Accounting

b. Auditor

c. Cashier

d. Manager Financial

7.      What is the goal of an auditor's report?

a. To give the advantage to the company

b. To document reasonable assurance that a company’s financial statements are free from material error

c. To strengthen the financial statements of month ago

d. To clarify the financial statements of the last month, will there be unsuitable or not

8.      An auditor's report provides an opinion of the validity and reliability of a .......... or organization’s financial statements (in paragraph 1)

a. Cafe

b. Hospital

c. School

d. Company

9.      What the auditor can share in the financial statement? (in last paragraph)

a. The financial statements of other companies

b. Reservations or additional information

c. Information of other companies about their statement

d. Opinion about the validity and reliability

10.  What is the definition of Auditor’s Report?

a. The Data Protection Act of 1998 is the law that governs the processing of personal information

b. The series of documents, computer files, and other records that are examined during an audit

c. An auditor's report is provides an opinion of the validity and reliability of a company or organization’s financial statements

d. A document sent to a client to remind them to make payment on an overdue invoice