What Do Independent Auditors Do?
A company’s outside, independent auditor examines the company’s financial statements and provides a written report that contains an opinion as to whether the financial statements are fairly stated and comply in all material respects with GAAP. In addition, some companies also use internal auditors to review the financial reporting processes and internal accounting controls to assure that the company’s systems are appropriately designed and operating effectively. Who Prepares a Company’s Financial Statements? A company’s management has the responsibility for preparing the company’s financial statements and related disclosures. The company’s outside, independent auditor then subjects the financial statements and disclosures to an audit. During the audit, the outside auditor obtains an understanding of the company’s internal controls and then applies “auditing procedures,” which may include inspection of the company’s books and records, observation, inquiries, and confirmations. The proce
