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According to Lester A. Leight, 1963,the four auditing standards specified in " Generally Accepted Auditing Standards'' show that there are six common types of auditor's reports, each one presenting a different situation met during the auditor's work. Which are unqualified opinion report (Affirmative), unqualified opinion report (Negative/Adverse), qualified opinion report, Piece-meal opinion report and disclaimer of Opinion report (Full Audit) and disclaimer of Opinion report (No or Insignificant Audit).
For Reliance Pacific Berhad annual report, we had been identified that the annual report which issued by auditor on the company's financial statement is under the category of unqualified opinion report (Affirmative). According to the Independent Auditors' report to the member of Reliance Pacific Berhad (second paragraph), which shows that the opinion is said to be unqualified because the independent auditor has formed that the Financial Statement gives a true and fair view in relation to the financial reporting framework used for the preparation and presentation of the Financial Statements.
Besides, Independent Auditors' report to the member of Reliance Pacific Berhad prepared by the Independent Auditor which has formed the opinion based on an examination made in auditing standards that the presentation regarding with Generally Accepted Accounting Principles (GAAP)applied on a constant basis and also consisted of all information revelations required to make the statement not misleading.(Lester A. Leight, 1963)
Furthermore, there is included of all material matters relevant to the accurate presentation of the financial information subject to statutory requirements and applicable. For instance, the report consists of a title and header, a main body, the auditor's signature and address, and the report's issuance date. For the unqualified report, the main body of Independent Auditors' report to the member of Reliance Pacific Berhad involves nine paragraphs, and each paragraph includes different purpose and standard wording.
The first paragraph which is Report on Financial Statement, it referred as the introductory paragraph to state the audit work performed on the Statement of financial position of the group and also of the company, the statement of comprehensive income and also others information revelations to the financial statement.
The second paragraph referred to the Directors' Responsibility for the Financial Statements and third paragraph which is Auditors' Responsibility, both of the paragraphs identifies the responsibilities of the auditor and the auditee in relation to the financial statements.
Besides, the fourth paragraph and fifth paragraph detail the scope of audit work, provides a general description of the nature of the work, examples of procedures performed, and any limitations the audit faced based on the nature of the work.
The sixth paragraph referred to as the opinion paragraph, which simply states the auditor's opinion on the financial statements and whether they are in accordance with generally accepted accounting principles.
In addition, the seventh paragraph states that the audit was performed in accordance with the country's prevailing generally accepted auditing standards and regulations which is the Report on Other Legal and Regulatory Requirement and stated the others report responsibilities and others matter state on the last two paragraphs.
Last but not least, the unqualified opinion report issued by the independent Auditors for the Reliance Pacific Berhad annual report has been properly determined and disclosed in the Financial Statements through the accounting principles or the method of their application.
The following is the Independent Auditors' Report to the Members of Reliance Pacific Berhad which showed the Independent Auditors issued a standard unqualified auditor's report on the annual report:
However for the annual report of Silver Bird Group Berhad, which issued by auditors on the company's financial statement is under the category of disclaimer of Opinion report (Full Audit).
Auditors issued disclaimer opinion for the annual report of Silver Bird Group Berhad, this is because they are incapable to shows sufficient appropriate audit evidence to provide a basis for their audit opinion, and the auditors determine that the probability of effects for undetected misstatements on the financial statements, because the consequence of a certain greatly material matter cannot currently be determined (ISA 705, 2009).
Besides, the auditors have not been able to obtain audit evidence about the amount of inventories of the company and accounts receivable. For instance, the auditors failed to obtain all the information required to corroborate the additions of plant and equipment amounting to RM4.9 million for the Silver Bird Group Berhad. Moreover, the auditors unable to verify the accuracy of sales transactions take on by the Silver Bird Group Berhad with six customers included four customers from the bakery division and another two customers from the telecommunication division amounting to RM149.0 million included in profit or loss
The auditor issued the disclaimer of opinion report because of fail to obtain sufficiency of audit evidence at the same time the auditor indicated the paragraph of introductory of the auditor's report to show that the auditor was involved to audit the financial statements and also described about the auditor's responsibility and presented the audit scope to state as the following: "Our responsibility is to express an opinion on these financial statements based on our audit in accordance with approved standards on auditing in Malaysia. Because of the matter described in the Basis for Disclaimer of Opinion paragraph, however, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion."(ISA 705, 2009)
Furthermore, the Auditor has not been able to acquire sufficiency of audit evidence to determine the damaging amounts of the investment in subsidiaries and loans of subsidiaries of the Company and the relevance of the preparation of the financial statements of the Silver Bird Group Berhad on a going concern basis.
The following is the Independent Auditors' Report to the Members of Silver Bird Group Berhad which showed the Independent Auditors issued a disclaimer of Opinion report (Full Audit) on the annual report: