The audit exception report refers to a disclaimer that is issued by either an internal auditor or an independent external auditor as a result of an internal or external audit. It is issued as an assurance service for the user to make decisions based on the results of the audit. It is considered an important tool while reporting some financial information to the users, specifically in business.
10+ Audit Exception Report Templates in PDF | DOC
1. Audit Exception Fiscal Year report
2. Simple Audit Exception Report
3. Audit Risk Exception Report
4. Audit Resolution Exception Report
5. Basic Audit Exception Report
6. Road Safety Audit Exception Report
7. Student Record Audit Exception Report
8. Audit Process for Exception Report
9. Audit Legal Exception Report
10. Audit Corrective Action Exception Report
11. Safeguarding Audit Exception Report
What is an Exception Report?
A document that states certain instances in which the actual performance has diverged remarkably from the expectations, usually in a negative direction is known as an exception report. This report is intended to focus management attention on just those areas that require immediate action. For instance, an exception report could point out those cases in which certain expenses were higher than the budget, or where the production levels were comparatively lower than the production plan.
What Does Auditing Mean?
The process of evaluating or analyzing a company’s internal functions for its success and compliance, in an independent manner is known as auditing. This process helps a business in understanding the areas of improvement and analyze what is working for them and what is not. The process of auditing can either be internal or external. The auditing is an internal one when the auditors belong to the organization’s internal body. Whereas, when an external government body or an agency is included in the auditing, then it is known as external auditing.
Meaning of Audit Report
A particular report that summarizes the findings of the audit that has been conducted and that points out the issues and suggests some remedial actions is known as an audit report. It also reflects the action plan that is suggested by the management of the company. Audit reports are normally made around the following important elements.
- Condition: It describes the condition or the problem in the process that is found during the audit.
- Criteria: An audit report indicates the criteria that were not met such as a quality standard, a company policy document, or some accounting policies, etc.
- Cause: The report also shows a cause that includes a reason for the problem in the process or explains why the problem has occurred.
- Consequence: It mentions what can the problem lead to or explains the negative outcome or the risks related to it.
- Corrective Action: The report also lays out what can the management do to correct the problem and by when?
The purpose of an audit is not just to deliberately find the faults but it is an efficient way to set right the company processes if they are not being followed correctly. Therefore, audit reports must be taken seriously by companies as they provide them opportunities for improvement. They are considered to be essential tools that can help a business in achieving its objectives and move towards its growth.
Meaning of Audit Exceptions
Audit exceptions are generally certain inconsistencies or deviations from the anticipated result of testing one or more of the service organization’s control activities. Each important description of the audit must also undergo testing by your auditor and he or she must verify and validate that description is accurate. The auditor must also mention that the controls have been suitably designed and are operating effectively to achieve all the objectives related to control or around its criteria.
What are the Elements of Audit Report?
The following are some of the basic elements of an auditor’s standard report on a company’s financial audit:
- It starts with a title that includes the word “independent.”
- It then states a statement that the financial statements in the report were audited properly.
- A statement stating that the financial statements are the responsibility of the company’s management and that the auditor’s responsibility is to convey an opinion on the financial statements based on his/her audit.
- A statement mentioning that the audit was conducted accordingly with the generally accepted auditing standards.
- A statement saying that those standards require that the auditor plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of any mistakes.
- A statement stating that an audit includes examining, assessing and evaluating processes.
- A statement mentioning that the auditor believes that his/her audit provides a sensible basis for his/her opinion.
- It contains the manual or printed signature of the auditor’s firm along with the date of the audit report.