Audit Report vs Audit Certificate: Difference and Comparison

Key Takeaways

1. An audit report is a document that presents the findings of an external audit, including the auditor’s opinion on the financial statements’ fairness and accuracy.
2. An audit certificate is a document issued by an auditor as a formal statement of their opinion on the accuracy of the financial information presented.
3. The audit report provides a detailed analysis and explanation, while the audit certificate is a concise summary of the auditor’s opinion.

What is an Audit Report?

After carefully examining the company’s books and records, an auditor will indicate in an audit report whether or not the books and records give a truthful and fair picture of the company’s financial status. A clean report indicates the auditor is satisfied with all material aspects. At the same time, a qualified, unfavorable disclaimer or a reservation of opinion on any point must be accompanied by an explanation of the auditor’s thinking.

The result of any audit is always a report. This delivery is made available to the client after completing the audit. Without the auditor’s end submitting an audit report, the audit procedure cannot be properly ended.

Simply put, it’s a document that summarises the auditor’s findings from a study of the financial accounts of a particular organization. It is crucial to the auditing process and cannot be skipped. Since it contains the auditor’s view on the company’s books, it is relied upon by many parties interested in the company’s financial health.

This report needs to be written such that the average person may understand it. In addition, it has to be clear so that shareholders and other interested parties have better knowledge and protection. If the auditor’s report contains any reservations or criticisms of the company’s operations, they must be presented to the shareholders at the annual meeting.

What is an Audit Certificate?

An audit certificate is a written or spoken statement issued by an auditor attesting to the accuracy of data specified by the customer. The auditor does not offer an opinion or estimate of the correctness of an audit certificate. The auditor assumes legal responsibility for the information in an audit certificate since he or she attests to its integrity.

The financial statements are guaranteed to be correct. This certificate verifies the authenticity of the financial statement. Accordingly, the auditor must verify the accuracy of every piece of information contained in the statement before certifying it. The auditor who signs or issues the certificate is effectively vouching for the integrity of its claims.

 It is also the auditor’s responsibility to insist that the certificate was issued at the company’s request and is valid solely for the specified use or submission to the designated authority. The auditor’s certificate should be addressed to the customer, the Public Authority, or whoever requests it. It’s acceptable to address it “to whomsoever it may concern” in certain circumstances.

Difference Between Audit Report and Audit Certificate

1. An audit report is an auditor’s opinion about the accounts, whereas an audit certificate is a confirmation of the accuracy and correctness of matters.
2. An audit report is based on assumptions and estimations, whereas an audit certificate is based on actual figures and facts.
3. The scope of an audit report is enormous, while the scope of an audit certificate is limited.
4. An audit report is less reliable than an audit certificate because it does not guarantee accuracy and correctness.
5. The law provides the format for an audit report. On the other hand, an audit certificate has no standard format.
6. Auditors can’t be held responsible for their audit reports, whereas they will be held responsible for their audit certificates.

Comparison Between Audit Report and Audit Certificate

Parameters of Comparison	Audit Report	Audit Certificate
Meaning	Expression of opinion about the account.	Confirmation of the accuracy
Basis	Assumptions and estimations	Facts and figures
Scope	Large	Limited
Reliability	Less	More
Format	Prescribed by law.	No standard format
Responsibility	Auditors can’t be held responsible.	Auditors will be held responsible.

References

1. https://www.jstor.org/stable/239433
2. https://egrove.olemiss.edu/cgi/viewcontent.cgi?article=1132&context=dl_proceedings