Auditor issues Annual report of company refering to___.

The auditor issues the Annual Audit Report of a company referring to shareholders (members of the company).

The auditor is appointed by the shareholders in the Annual General Meeting and acts as their agent. The primary duty of the auditor is to examine the books of accounts and financial statements prepared by the management and report the findings to the shareholders.

The audit report begins with "To the Members of [Company Name]" because:

• Shareholders are the owners of the company who need an independent opinion on whether the financial statements prepared by management are true and fair
• The auditor is accountable to the shareholders, not to the directors or management whose work is being audited
• As per the Companies Act, 2013, the auditor's report must be addressed to the members of the company

The auditor provides an independent assurance to shareholders that the financial statements can be relied upon for decision-making. This is why the audit report is addressed to shareholders and not to the directors, management, or even the auditors themselves.