Short-Form Report

Short-Form Report

Investopedia / Yurle Villegas

What Is a Short-Form Report?

A short-form report is a brief summary of an audit that has been performed on a company's financial statements. The report usually precedes a company's summary balance sheet or financial statements when they are requested by another party.

Key Takeaways

  • A short-form report summarizes an audit that an auditor has performed on a company's financial statements.
  • Short-form reports are usually two paragraphs long and consist mainly of the auditor's opinion of the financial statements they reviewed.
  • The first paragraph is known as the "scope," providing a description of what the auditor has done, while the second one, known as the "opinion section," provides an account of the auditor's findings.
  • The short-form report must comply with the requirements of the Securities and Exchange Commission (SEC) and the American Institute of Certified Public Accountants (AICPA).

Understanding a Short-Form Report

The short-form report often consists of two paragraphs. The first paragraph describes the scope of the audit, referring to what financial statements the auditor has examined, while the second one presents the findings of the audit, outlining the auditor's opinion on whether or not the financial statements of the company are factual and accurate.

The short-form report is essentially a condensed version of the long-form report. The latter provides additional information about an auditor's activity and opinion, including any recommendations for the client, evaluations on the financial status of the company, as well as a percentage change in the accounts on the financial statements.


The first paragraph of the short-form report, describing what the auditor has performed, is known as the "scope," while the second one, describing the auditor's findings, is known as the "opinion section."

A short-form report generally costs less money to produce because it takes the auditor less time to prepare. It may be used by itself or in conjunction with a more detailed long-form report or complete auditor's report when more information is requested.

Though brief, the short-form report still must abide by strict rules. These reports are held to the reporting requirements outlined by the Securities and Exchange Commission (SEC) and the American Institute of Certified Public Accountants (AICPA). 

Special Considerations

The short-form report's brief length may not be sufficient to provide all desirable information if the auditor issues any opinion other than "unqualified." An unqualified opinion means the auditor feels the financial statements are accurate and meet generally accepted accounting principles (GAAP) standards and other statutory requirements.

A qualified opinion, on the other hand, does not represent a clean bill of health. It indicates that the auditor feels the financial statements, overall, are accurate, but also contained a few issues that merit mentioning, even if they didn’t compromise the accuracy of the accounting data.

When an issue is prevalent enough to compromise the accuracy of the accounting data, the auditor will issue either a disclaimer or adverse opinion instead.