What is an Auditor's Report?
An auditor's report is a statement included in a company's annual financial report that certifies the validity of a company's financial statements according to an outside auditor.
How an Auditor's Report Works
By law, companies in the U.S. are required to have their financial statements reviewed by an outside auditor to ensure that they truthfully reflect the company's financial status. This review conforms to what is known as the generally accepted accounting principles (GAAP).
After having reviewed a company's financial statements, the auditor will issue an official auditor's report. This report reflects the auditor's opinion concerning the company's conformity to GAAP, in addition to the accuracy of its financial statements.
Why an Auditor's Report Matters
An auditor's report provides a qualified third-party perspective on a company's financial performance in a given year. This analysis can provide investors a more comprehensive insight into the company’s finances from an unbiased point of view.