Audit Report

The auditors express a qualified report after checking the financial statements of Shonargaon
textiles ltd. A qualified opinion is a statement issued in an auditor’s report that accompanies a
company's audited financial statements. It is an auditor's opinion that suggests the financial
information provided by a company was limited in scope or there was a material issue with
regard to the application of generally accepted accounting principles (GAAP)—but one that is
not pervasive. Qualified opinions may also be issued if a company has inadequate disclosures in
the footnotes to the financial statements[ CITATION Inv19 \l 4105 ].

A qualified opinion may be given when a company’s financial records have not followed GAAP
in all financial transactions, but only if the deviation from GAAP is not pervasive. The term
"pervasive" can be interpreted differently based on an auditor's professional judgement.
However, to not be pervasive, the misstatement must not misrepresent the factual financial
position of the company as a whole and should not have an effect on decision-making of
financial statement users.

The company unable to provide adequate and reliable audit evidence to determine the temporary
differences between the accounting and tax values of the company’s assets and liabilities. The
auditors believed that the evidence they have obtained is sufficient and appropriate to provide
qualified opinion. However, the audit report conducted in accordance with International
Standards on Auditing.
Recommendation

Shonargaon Textiles Limited is the biggest textile concern in South Bengal. It is really quite
difficult to give suggestions to such a well-established organization. However, we have some
recommendations for Shonargaon Textiles Ltd based on our learning, observation and findings.
Those are given below:

 To confirm that the company is governed in accordance with considered guidelines so

that the investors can be rewarded in the short term and their investments grow in a
sustainable way in the long term.
 To present and reviews the strategic plans of each and every quarter. They should pay
present all relevant evidence to external auditors in order to get unqualified audit opinion.
This is the best audit report that a company can receive.

Conclusion

Sonargaon Textiles Ltd. (STL) established in the year 1985, is a spinning project in textile sector.
STL is 100% export oriented. It is a public limited company listed with Dhaka and Chittagong
Stock Exchanges in the year 1995. It is financed by different banks (both Nationalized &
Private). We have gone through the Financial Statements of Shonargaon Textiles Limited which
comprises the statement of financial position as at 30 June 2019, the statement of Profit or Loss,
statement of changes in equity and statement of cash flows for the year ended 30 June 2019.
Moreover, management of Shonargaon textiles Limited is responsible for the preparation and fair
presentation of these financial statements in compliance to Bangladesh Financial Reporting
Standards (BFRSs) and Bangladesh Accounting Standards (BASs), the Companies act 1994 and
other applicable laws and regulations and for such internal control as management determines is
necessary to enable the preparation of financial statements that are free from material
misstatements.