Types of Auditor’s Reports and Other Facts in the Auditor’s Report

The mission and purpose of an audit of financial statements is to express the opinion of an independent, qualified professional on the reliability of the financial statements prepared and disclosed by management. The auditor verifies whether the data in the financial statements give a true and fair view of the financial position, results of operations and, if applicable. cash flows in accordance with the rules prescribed by Czech or other accounting regulations, often with International Financial Reporting Standards (IFRS). The auditor’s opinion has sufficient informative value only in connection with certain complete financial statements on which the auditor expresses an opinion. The auditor’s opinion expressed in connection with specific financial statements is confusing.


Statutory audit
 means, pursuant to Section 2, Paragraph a) of Act No. 93/2009 Coll., On Auditors, as amended, verification of financial statements or consolidated financial statements, whether it gives a true and fair view of the subject of accounting in accordance with legal regulations, and the relevant financial reporting framework on the basis of which the financial statements or consolidated financial statements are prepared, if such verification is required by other legislation or directly applicable regulation of the European Union; where appropriate, audits of interim financial statements, if such audits are required by other legislation.


Pursuant to Section 2, Paragraph c) of Act No. 93/2009 Coll., On Auditors, as amended, audit activity means:

  • carrying out a statutory audit,
  • review of management according to another legal regulation, if this review is performed by an auditor,
  • verification of accounting records,
  • verification of other economic information by the auditor or performance of other activities by the auditor, if so provided by another legal regulation or directly applicable regulation of the European Union,
  • or other auditing of the financial statements, other accounting records or parts thereof.

An audit is a verification engagement , which is an engagement in which an expert expresses a conclusion in order to increase the level of confidence of prospective users other than the responsible party in the result of evaluating or valuing the subject matter of the engagement against given criteria (International Framework for Assurance Engagements).


The objective of an audit of
 financial statements is to enable the auditor to express an opinion on whether the financial statements comply with the applicable financial reporting framework in all material respects (International Standard on Auditing (ISA) 200 “Objectives and General Principles of Auditing Financial Statements”).

When performing a statutory audit , the auditor is obliged to verify whether (Section 20, Paragraph 1, Letters c) and e) of Act No. 93/2009 Coll., On Auditors, as amended):

  • the financial statements or consolidated financial statements give a true and fair view of the subject matter of accounting in accordance with the law and the relevant financial reporting framework on the basis of which the financial statements or consolidated financial statements are prepared,
  • The information contained in the annual report or the consolidated annual report, which describes the facts that are also the subject of the presentation in the financial statements or consolidated financial statements, is in all material respects consistent with the relevant financial statements or consolidated financial statements.

Types of Auditor’s Reports and Other Facts in the Auditor’s Report

Unqualified – The auditor states that the auditor considers the financial statements to provide a true and fair view of the subject matter in all material respects in accordance with the law and the applicable financial reporting framework.

Subject – The auditor states that the financial statements give a true and fair view of the subject matter in accordance with the law and the applicable financial reporting framework, except as described by the auditor.

Negative opinion – the auditor states that in his opinion the financial statements do not give a true and fair view of the subject matter of accounting in accordance with legal regulations and the relevant financial reporting framework.

Rejection of the opinion – the auditor states that he was limited in his activities to such an extent that he was not able to issue his opinion.

Emphasis of Matter in the Auditor’s Report  – is a paragraph in the auditor’s report that draws attention to a fact duly disclosed in the financial statements or explained and described in the financial statements that, in the auditor’s judgment, is critical to the user’s understanding of the financial statements.

Other Facts in the Auditor’s Report  – A paragraph in the auditor’s report that highlights a fact that is not disclosed in the financial statements or explained and described in the financial statements but is, in the auditor’s judgment, relevant to understanding the audit, auditor’s responsibilities or auditor’s report.

The obligation to audit financial statements is determined by accounting entities:

Directly according to § 20 par. 1 let. a) to d) of Act No. 563/1991 Coll., on Accounting, as amended – overview here

Pursuant to Section 20, Paragraph 1 of  Act No. 563/1991 Coll., On Accounting, as amended, ie with reference to a special legal regulation – an overview here

 

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