What is public company auditing?
Public companies are required by federal law to regularly file a number of public fi¬nancial reports to inform investors and policymakers about business performance. Public companies’ annual financial statements are audited each year by independent auditors who examine the data for conformity with U.S. Generally Accepted Accounting Principles (GAAP). The auditors con¬duct a systematic examination of a company’s accounting books, transaction records and other relevant documents to consider whether the financial statements are fairly presented and free from material misstatements. The auditor prepares a written report containing an opinion on the financial statements. That opinion is filed with the U.S. Securities and Exchange Commission (SEC) and is available to investors and other interested parties. In addition to auditing financial statements, auditors often also assess the effectiveness of a company’s internal controls over financial reporting. Internal controls are procedures desig
