Bank of America second mortgage audit report

What is an audit report?
The auditor’s report is a written letter from the auditor that contains his opinion on whether the company’s financial statements comply with GAAP and are free from material misstatement. The independent and external auditors’ report is generally published with the company’s annual report. An auditor’s report is important because banks and creditors require an audit of a company’s financial statements before lending them.

How does the auditor’s report work?
The auditor’s signature is a written letter that accompanies the company’s annual accounts, stating their opinion that the company’s traditional accounting policies are followed. The auditor’s signature must be submitted with a public company’s financial statements and reported earnings to the Securities and Exchange Commission (SEC).

However, the auditor’s report is not an assessment of whether a business is a good investment. The audit report is not an analysis of business performance during the period. Instead, the report is just a measure of the strength of the financial statements.

The Components of an Auditor’s Report
The auditor’s letter follows a standard format, as set out in the General Auditing Standards (GAAS). A report usually consists of three sections.

In the first paragraph. Provides for the duties of auditors and board members.

The second section contains the scope that indicates that standard accounting policies are guidelines.

In the third paragraph. Auditor’s opinion.

An additional item may inform the investor of the results of a special audit of the other role of the unit. The investor enters the third paragraph where the opinion is stated.

The type of report published depends on the auditor’s findings. Below are the most common types of reports published for companies.

Incompetent report
A clean report means that the company’s financial data is free from material misstatement and complies with GAAP guidelines. The majority of audits end with unqualified or categorical comments.

Reasonable notice
An opinion may be issued in one of two cases: first, if the financial statements contain material misstatements that are not material; or, second, if the auditor is unable to obtain sufficient appropriate audit evidence to form an opinion, but the potential consequences of any material misstatement are immaterial. For example, there may be an error in the calculation of operating costs or profits. Auditors typically identify specific causes and areas where problems exist so the company can fix them.

Incorrect inspection
An inappropriate opinion means that the auditor has obtained adequate audit evidence and concludes that the misstatements in the financial statements are both material and general. Negative feedback is the worst outcome for a business and can have lasting effects and legal ramifications if left uncorrected.

The disclaimer means that, for any reason, an auditor cannot obtain sufficient audit evidence to support the opinion, and the potential impact of undetected discrepancies, if any, may be significant and far-reaching on the statements financial. For example, where an auditor cannot be neutral or where access to certain financial information has been denied.

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Example of an auditor’s report
Excerpts from Deloitte & Touché LLP’s audit report for Starbucks Corporation, dated November 15, 2019, are enclosed.

Item 1: Opinion on the financial statements
We have audited the consolidated financial statements of Starbucks Corporation and its subsidiaries (the “Company”) as of September 29, 2019, and September 30, 2018, the consolidated statements of profit, comprehensive income, equity, and cash flow, for each of the three for the period ended September 29, 2019, together with the accompanying notes (hereinafter referred to as the “financial statements together”).

In our opinion, the annual accounts give a clear picture, in all material respects, of the financial position of the company as of September 29, 2019, and September 30, 2018, as well as the results of its operations and the individual cash flows. Three years. During the period ended September 29, 2019, following United States generally accepted accounting principles.

Chapter 2: Basis of opinion
“We conducted our audit following the standards of the Swedish Financial Accounting Standards Board (PCAOB). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement, whether Our review included procedures to assess the risk of material misstatement of the financial statements, whether due to error or fraud, and procedures to address those risks.


These methods included the examination, on a test basis, of the relevant audit evidence concerning the amounts and the information provided in the financial statements. Our audit also covered the accounting policies used and the significance of management’s estimates, as well as the overall presentation of the financial statements. We believe that our audits provide a fair basis for our opinion.

Understand how lenders verify bank statements
Banks and mortgage lenders obtain loans based on a variety of criteria, such as the borrower’s income, assets, savings, and creditworthiness. When buying a home, the mortgage lender may ask the borrower for proof of deposit. The lender must verify that the necessary funds for the purchase of the house have been accumulated in a bank account and access to the lender.

A deposit slip is a proof that money has been deposited or accumulated in a bank account. A mortgage company or lender uses a proof of deposit to determine if the borrower has saved enough money for a down payment on the home they want to buy.

For example, in a typical mortgage, a borrower can make a 20% down payment to buy a home. If this is a $ 100,000 home, the borrower should make a $ 20,000 down payment. The mortgage lender would use proof of deposit to verify that the borrower has $ 20,000 in your bank account for the down payment. Additionally, the lender must ensure that sufficient funds are available to pay for the closing costs associated with a new mortgage. Closing costs are additional costs that may include appraisal fees, taxes, title searches, title insurance, and deed registration fees. A mortgage calculator can show you the impact of different rates on your monthly payment.

The borrower usually provides the bank or mortgage company with two of the most recent statements in which the company will contact the borrower’s bank to verify the information.

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