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The auditor report in a company's annual report is often overlooked, yet it provides valuable insights into the audit's purpose, execution, scope, and limitations. Key to understanding is the principle that absence of evidence does not equate to evidence of absence. This concept will be clarified through an illustrative example later in the video, specifically using the auditor report from Alphabet Inc., audited by Ernst and Young (EY). Since auditor reports tend to have similar wording, grasping this format with one company will help in recognizing it across various annual reports.
