The Commission was complemented by the National Treasury for receiving unqualified (clean) audit opinion from the Office of Auditor General for the financial year 2018/2019. (Period ended 30 June 2019)
But what is a clean audit? Why is it important?
A clean audit refers to unqualified audit opinion. In layman’s language, unqualified opinion is a statement from the independent auditor that the financial statements of an organization present fairly, in all material respects, the financial position of that organization and of its financial performance and its cash flows for the reporting period.
Further, that the Auditor was satisfied with the organization’s effectiveness of internal controls, risk management, governance and the use of public resources.
The unqualified audit opinion is one among the various audit opinions that may be issued based on the status of an organization’s financial reports. Others include qualified and adverse opinions which may not be very common with organizations that adhere to strong internal controls and good corporate governance.
The Auditor’s opinion plays a key role as readers and users of financial statements base facts on the opinion expressed. There are very many benefits that an entity gets on receiving unqualified audit opinions for their financial statements.
Some of these benefits may include: Improved stakeholder’s perception of management’s integrity given that the opinion given confirms that the financial information provided is the true and fair position of an organization, Improved credit terms from suppliers and service providers.
CRA, being one among the few entities that have continued to receive unqualified Audit opinions since inception, has a likelihood of being granted favourable credit terms from its service providers. This would be on the strength of its proper financial reporting as supported by the audits conducted.
Creditors and other financiers rely on financial statements to assess the creditworthiness of an Organization many of whom stipulate that the company must receive unqualified audit opinion to be in good standing with loan terms or covenants.