Comparison Of Auditor’s Report Of Kuwait And US Companies
In this report we are going to explain the auditor reports of 4 Kuwait companies and 4 US companies. We can observe that what audit team say about the companies as per their business dealings and provide purely true and sufficient opinion about the companies.
here we have 4 Kuwaiti companies and their auditor’s opinion about the companies;
Coast Investment And Development Company
in the audit report of company the auditor say that all the consolidated financial statements show truly, according to all related material, the financial position and performance and cash flows are prepared according to international financial reporting standards used by Kuwait state. In company, management are responsible for making and true presentation of all consolidated financial statements follow by standards and also concern the internal control for avoid material misstatement. Auditor use all the procedures and rules to collect the audit evidence related to disclosures and amounts.
Its up to auditor to select the process which include risk assessment due to any fraud or error. Actually in audit report, auditor measure all the rules, regulations and policies that company used to prepare its financial statements with legal laws and policies. Auditor’s report verify all the related material that must be free from any error and proper and true presentation and recording in the books of company occur because many people’s amount involve in the financial structure of company and investors are very much concern about the financial position of company because its investment growth depend on the position of company which must be profitable in the future and must be provide benefit to all investors so that other investors attract towards the company and company’s financial condition going upward. (coast.com.kw, 2015)
Arzan Financial Group For Financing And Investment
In the audit report of Arzan financial co, the auditor say that accompanying consolidated financial statement show truly as per all material point of view, and all statements are prepared according to international financial reporting standards used in the Kuwait state. According to auditor, we do audit work according to International standard on auditing. We work independently in the group by following international ethics standards board for accountants ‘code of ethics for professional accountants, and we follow all requirements related to ethical responsibilities. We collect all appropriate and sufficient audit evidence which provide a strong base for audit opinion.
The available for sale investment of the group show 52% of complete asset of company, the valuation of these instruments are depend on entity development internal models or external valuation independent. So many valuation uncertainties involve in the methods. So proper and required audit efforts are required to measure the accuracy of valuation and related assumptions. Audit procedure also include of unquoted investment at agreeing carrying value for using valuation techniques, challenging the appropriateness and assessing the assumptions, methodology, estimates and acquire related explanations and documents.
Group also includes many associates which also present in its financial statements. Group show proper influence according to associates and use equity method for this consideration. Group’s control environment complexity increase with geographical structure and auditor has to understand all transactions with related parties. So due to significant investments in association the financial statement of group is key factor for audit point of view. (arzan.com.kw, 2016)
Kuwait Finance House
In the audit report of Kuwait finance house, the auditor say that the accompanying consolidated statement of financial position show truly, related to all material points of view, and all statements are prepared according to international financial reporting standards used in state of Kuwait. We do auditing according to international standard on auditing. We independently follow the international ethics standard board for accountant code of ethics for professional accountants and follow our all responsibilities.
We collect appropriate and sufficient audit evidence for opinion. Financing receivables impairment is a major area where management judgment is applied as impairment events identified, and measurement of reasonable assumptions and parameters for impairment calculation. Financing receivables are representing almost 49.55% of assets in total and their estimation uncertainty, this factor become most important in audit matters.
Audit process has control assessment on booking, monitoring, collecting process and granting related to financing receivables and provision of impairment process. impairment of joint venture and associates are measured under equity method. It affect audit due to group share and carrying value of joint venture and associates. So it’s also considered very important for audit purpose. Impairment test of trading properties and investment properties are also very important part for audit assessment as their valuation is very concern for group calculation. Valuation of currency swaps, forward commodity contracts, profit rate swaps and forward foreign exchange is also very important point in the matter of audit. Group has significant derivatives of Islamic financial instrument and because of these instruments and uncertainty and estimations, risk also consider as misstated liabilities and assets are recorded. (kfh.com, 2016)
Al Madar Finance And Investment Co.
In the audit report of Al Madder finance and investment company, auditor say that we audited the all consolidated financial statements of company and its subsidies which have all the necessary information belong to financial position of company. Its management manages and prepares all the financial statements according to international financial reporting standards used in the state of Kuwait. Management also considers the internal control. auditor conduct the audit as per international standard on auditing, which need compliance with ethical requirements, performance and plan of sufficient audit .auditor use different procedures and process to collect the audit evidence related to all disclosures and amounts.
It’s selected by judgment of auditors. All financial statements and notes are show true picture of company and its financial position; financial performance and cash flows are according to international financial reporting standards of Kuwait state. We also divert the attention towards the current liabilities of group which are higher than current assets of company. All books of accounts are kept by company and having all related information which are most important part of auditing and play important role in auditor’s opinion.
we have four us companies that present their audit report:
the auditor said that we take the audit of general motors’ including its all financial statements and reports and we consider its internal control related to financial reporting. According to Internal Control –Integrated framework that is issued through committee of sponsoring organization. The management is responsible for all the preparation of financial statements, maintenance of internal control and its effect on financial statements. Auditor’s duty to collect all the audit evidence by using their own procedures and process and provide an opinion about the company’s financial position and its internal control. Audit is conducted through public company accounting oversight board.
Audit include examine the financial statement s on test basis and all required evidence which support disclosures and amounts in statements and assessing the accounting principles and estimates and evaluation of overall presentation. Internal control audit include all detail understanding of internal control, assessing the risk, evaluating and testing the design of internal control related to assess risk. We sure that our all procedures for audit give us proper opinion. Internal control of company is design through company financial officers and executives.
Also board of directors, management and other persons, which related to financial statements. Internal control policies include all those procedures and policies, which include reasonable detail, reasonable assurance about transactions and reasonable assurance about detection of unauthorized acquisition of company’s assets. But due to inherent limitation on internal control, there must be a chance of improper management or collusion, misstatement material or time detection problem. (Gm.com, 2016)
In the audit report of McKesson Company, the auditor said that we audit all the related financial statements and consolidated statements of company include its internal control over financial reporting according to internal control integrated framework. Management not included in the assessment of internal control. Rexall acquire 3% of total asset of company and less than 1% of revenue of company. Audit not as part of Rexall. Its management duty to prepare all the financial statement and reports and their effect on internal control. Auditor’s responsibility to present an opinion about financial schedules, statements and internal control of company. In accordance with public company accounting oversight board auditors, conduct audit.
Auditor prepares all the procedures and plans to check the misstatement of material and impact of internal control in all materials. Financial statement audit include test basis, examining, all related evidence which support disclosures and amounts, by using accounting estimates and assessing accounting principles that help in evaluating the statements. Internal control audit include detail prescription of internal control through financial statements, risk assessment, evaluating and testing the design of internal control and its effective operations. Internal control id prepared under the instruction of all senior members of company but due to inherent limitation, it’s not easy to find out all the risk which belongs to financial statement due to internal control. (annualreports.com, 2017)
In the audit report of Apple Company, the auditor said that we conduct the audit of all consolidated financial statements and related statements. The basic responsibility of preparing the financial statements are on management but responsibility of auditor is to express and fair opinion on the financial condition of company, which is very much important for the investors and public. Auditor take the audit according to public company accounting oversight board, that need proper procedures and plans to do audit to get assured about financial statements that are free from material misstatement or not.
This audit include, testing, examine and all evidence that help to understand all the disclosure and amounts given in financial statements. They assess accounting principles and estimates that prepare by management for evaluating the financial statement. According to our opinion, apple has all financial statements free from material misstatements and all material is fairly presented. We conduct audit according to internal control integrated frame work of internal control of company and express and unqualified opinion related to Apple Corporation. Auditors try to give true and fair picture of company. (Annual report.com, 2015)
In the audit report of Wal-Mart, the auditor said that we audit the internal control of company according to internal control integrated framework. Management duty includes preparation and arrangement of financial statements and internal control effects over statements. Auditor follows specific procedures and process to collect all audit evidence. Audit is taken on behalf of public company accounting oversight board. These provide proper plans to get assurance about internal control through financial statement help to maintain all the related material.
Audit process include all assessment of risk, evaluating and testing the design and effectiveness of operations based on risk and all other processes which give proper basis for making the opinion of auditor. Internal control of company provides reliable assurance about the financial statement of company and prepares the financial statements according to external accounting principles. Internal control maintain to keep all records, all transactions related to financial statements and timely detection of problem or error which occur due to wrong timing or any other issue.
Due to built in limitation of internal control, auditors cannot access all material misstatements. so as per auditor’s opinion company has all financial statements free from any error present true picture of company and give assurance about the reliability of company. so auditor’s responsibility is to tell the outsiders of company about the fair condition because these include all investors which invest their amount in the company to get benefits in the future. (Q4cdn.com, 2016)
- Annual report.com. (2015). Apple Inc. . Retrieved from http://www.annualreports.com/HostedData/AnnualReportArchive/a/NASDAQ_AAPL_2015.pdf
- com. (2017). McKESSON CORPORATION. Retrieved from http://www.annualreports.com/HostedData/AnnualReports/PDF/NYSE_MCK_2017.pdf
- com.kw. (2016). Arzan Financial Group for Financing and Investment K.S.P.C. Retrieved from http://www.arzan.com.kw/AnnualReports/Arzan_Annual_Report_English_2016.pdf
- com.kw. (2015). Coast investment and development co.K.S.C.P. Retrieved from https://coast.com.kw/media/b6d0ffc4-ccab-4651-a762-d5024558687f/ynsb8Q/AnnualReports/4078_Annual_Reports.pdf?download=false
- com. (2016). GENERAL MOTORS COMPANY. Retrieved from https://www.gm.com/content/dam/gm/en_us/english/Group4/InvestorsPDFDocuments/10-K.pdf
- com. (2016). Kuwait Finance House. Retrieved from https://www.kfh.com/en/reports/Annual-Reports/Annual-Report-2016/document_en/English.pdf.pdf
- com. (2016). Walmart. Retrieved from https://s2.q4cdn.com/056532643/files/doc_financials/2016/annual/2016-Annual-Report-PDF.pdf