Audit report translation and certification

The audit report is the document that gives a company's financial statements the credibility of an independent professional: it is on the basis of the auditor's opinion that a foreign bank, investor or tender commission decides whether the figures can be trusted. The report is a short but strictly standardised text, where every phrase comes from the International Standards on Auditing, and one changed word changes even the type of opinion. Our bureau in Tbilisi translates audit reports with the official ISA terminology, processes them as one package with the financial statements and, where needed, notarizes them. Detailed guide: translation of audit reports and audited financial statements in the financial and business translation section: terminology, format, who asks for them and how they are certified.

What an audit report contains

In Georgia audits are carried out by audit firms registered with the Service for Accounting, Reporting and Auditing Supervision, in accordance with the International Standards on Auditing (ISA). Large companies and public interest entities are subject to mandatory audit, but many medium-sized companies commission a report voluntarily at the request of a bank or an investor. A standard report comprises the following parts:

• the auditor's opinion and the basis for the opinion
• key audit matters for public interest entities
• an emphasis of matter or other matter paragraph
• a description of the responsibilities of management and the auditor
• the auditor's signature, the firm's name, registration number and the date
• the full financial statements with notes as an annex

The four types of opinion and why they must not be confused

The highest risk in translating an audit report is rendering the type of opinion exactly, because that one phrase determines the whole value of the document:

• Unmodified opinion (unmodified or unqualified opinion): the statements present the financial position fairly.
• Qualified opinion: the statements are fair, except for a specific, described matter.
• Adverse opinion: the statements are materially misstated.
• Disclaimer of opinion: the auditor could not obtain sufficient evidence.

Machine translation often renders the Georgian "conditional opinion" as "conditional opinion", which does not exist in audit terminology and raises a foreign analyst's suspicion. Our translators use the official English, German and Russian ISA terminology so that the report reads naturally to an auditor in the target country.

When an audit report needs a translation

• International tenders and donor projects. The tender commission asks for the last 2-3 years' audited statements to confirm financial standing.
• A loan from a foreign bank or an international financial institution. The lender relies only on audited figures.
• An investor's due diligence. The type of opinion and the key audit matters are the investor's first questions.
• Group consolidation. The foreign parent company's auditor uses the Georgian subsidiary's report within the group audit.
• Stock exchange and bonds. When securities are placed, the issuer's report is part of the prospectus.
• Court and arbitration disputes. The auditor's opinion is part of the financial evidence.

What matters when translating an audit report

Standardised wording

Under ISA 700 the text of the report is written in a strictly defined structure, and the foreign reader looks precisely for these standard phrases: "In our opinion, the accompanying financial statements present fairly, in all material respects..." In the translation these phrases must match the official ISA text in the target language and not the translator's free interpretation. "Material misstatement", "audit evidence", "going concern" and "internal control" are terms with one established equivalent.

References to the statements

The auditor's opinion refers to specific pages, items and notes of the financial statements. If the report and the statements were translated by different translators, the same item appears under different terms in the two documents and the reader cannot find the correspondence. So we translate the report and the statements within one project, with one glossary and one editor.

The auditor's details

The name of the audit firm is transliterated or given in its official English name, if it has one. The auditor's name, registration number, signature, seal and the date of the report are translated or described in full, because it is these details that let the receiving side verify the auditor in the register.

Certification and apostille

An audit report is a private professional document and an apostille is not placed on it directly. For a bank and an investor a translation certified on the bureau's cover sheet is usually enough. A tender commission and a consulate often ask for a notarized translation, where the translation is attached to the original report or a notarized copy. For official submission abroad a notarized copy is prepared first, the Ministry of Justice places the apostille on it and only then is the document translated together with the apostille. We confirm the requirement as soon as we take the order, so that you do not miss a required certification.

Translating a foreign audit report into Georgian

A foreign company submits its own audited statements with a Georgian translation in Georgian public procurement, bank lending or to obtain a licence. We translate reports drawn up by the Big Four and local firms in English, German, Turkish and Russian with the Georgian ISA terminology and add an explanation of the standards (for example US GAAS) that differ from ISA.

Turnaround

An audit report taken separately is 3-5 pages and is ready within one or two working days; the report together with the full statements (40-80 pages) takes 5-7 days. For regular clients the translation of the annual report is prepared with the previous year's glossary, which reduces the turnaround.

Frequently asked questions