What is Auditor’s Report?
The auditor’s report is the formal written communication issued by an independent external auditor expressing an opinion on whether a set of financial statements is presented fairly, in all material respects, in accordance with the applicable financial reporting framework.
How It Works
- Unmodified (unqualified): financial statements are fairly presented.
- Qualified: a material but not pervasive misstatement or scope limitation exists.
- Adverse: financial statements are materially misstated and pervasively wrong.
- Disclaimer: auditor cannot obtain sufficient evidence to form an opinion.
Saudi Context
Auditors of Saudi joint-stock and listed companies are SOCPA-licensed and must follow International Standards on Auditing (ISA) as endorsed by SOCPA. The signed auditor’s report is required for filing the annual financial statements with the Ministry of Commerce, ZATCA, and the CMA for listed entities.
Example
A Saudi auditor concludes that a SAR 1,200,000 receivable provision is understated by SAR 400,000, a material but not pervasive issue. The auditor issues a qualified opinion ‘except for’ the provision shortfall.