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Why auditor is interested in management reports

The subject of management reports has been prominent the past few years. A management report is included in the annual report to shareholders. This report should not be confused with management's discussion and analysis of operations and financial condition that also is relatively new to the annual report.

The management report is included in the annual report to shareholders as a result of the urging of a number of groups and organizations. Consequently, the form and content of the annual report to shareholders continues to evolve as management attempts to present additional information that will be useful to the readers.

1. Explain the general purposes of the management report.
2. Identify five subject areas or topics which have been recommended for inclusion in the management report.
3. Explain why the content of the management report influences the activities of the external auditor the audit engagement?

Solution Preview

1. Explain the general purposes of the management report.

Management reporting carries information about the firm. The information generally either helps them to analyze part performance or helps them make decisions about future periods. Financial statements are typically reports about past performance. Budgets are typical reports that assist with planning and investing for future periods.

2. Identify five subject areas or topics which have been recommended for inclusion in the management report.

The range of subject areas for management reports can be very ...

Solution Summary

Your tutorial is 322 words and gives you ideas about many management reports and why auditors might be interested in these non-financial statement reports.

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