What are Audited Financial Statements?
An audit provides the highest level of assurance that financial statements are presented fairly in conformity with generally accepted accounting principles. The client generally prepares the financial statement or provides a trial balance from which the statements are prepared. The CPA obtains an understanding of the client’s business and its industry, and of the client’s internal control system. The CPA tests the internal control system to determine whether the system can be relied upon to reasonably prevent errors, fraud or misstatements from occurring. The CPA will perform various procedures which may include analytical procedures, confirmations of information with third parties, such as banks, customers and creditors, observation of physical inventory counts, inquiry of Company personnel, and other tests and procedures as considered necessary to reduce the risk that the financial statements are materially misstated. An audit is planned and performed to provide reasonable assurance
