Short-Form Report

A short-form report is a brief summary of an audit that has been performed of a company's financial statements. The report usually precedes a company's summary balance sheet or financial statements when they are requested by another party. The short-form report often consists of two paragraphs. The first describes the scope of the audit, which refers to what financial statements the auditor has examined. The second section gives the findings of the audit, which states the auditor's opinion on whether or not the financial statements of the company are factual and accurate. A short form may be used by itself or in conjunction with a more detailed long form or complete auditor's report when more information is requested.

The short-form report is a condensed version of the long-form report, which provides additional information about an auditor's activity and opinion. A short form report usually consists of only two paragraphs and includes the auditor's official opinion of the financial statements reviewed. One advantage of a short-form report is that it saves money because it takes the auditor less time to prepare. However, its brief length may not be sufficient to provide all desirable information if the auditor issues any opinion other than "unqualified." An unqualified opinion means the auditor feels the financial statements are accurate and meet Generally Accepted Accounting Principles (GAAP) standards and other statutory requirements.

A qualified opinion means the auditor feels the financial statements are overall accurate, but there were a few issues. It is not a clean bill of health. However, when a qualified opinion is issued, it does not mean the issue necessarily compromises the accuracy of the accounting data. When an issue is prevalent enough to compromise the accuracy of the accounting data, the auditor issues either a disclaimer or adverse opinion.