Consultancy

A financial statement audit is an examination, on a test basis, of evidence supporting the amounts and disclosures in a company’s financial statements and that such amounts and disclosures are accounted for in accordance with a generally accepted set of standards.

To provide financial statement users with reasonable, but not absolute, assurance that the financial statements prepared by management are fairly presented. This assurance is provided in the form of a written opinion report signed by the Certified Public Accounting firm.

An independent audit must be conducted by a Certified Public Accountant (CPA). The CPA may have accounting staff perform audit procedures but the staff must be fully qualified and must be closely supervised by the CPA. In addition, an independent audit of a publicly-held company, or a company about to go public must be conducted by a CPA in a firm that is registered with the U.S. Public Company Accounting Oversight Board (PCAOB).

The time to start and complete an audit will vary with the size of the company and the quality of its internal bookkeeping, accounting and record keeping. In general if a company’s records are in good order, the audit process should take anywhere from three to six weeks.

Audits provide the opportunity for a second set of eyes (usually those of a certified professional accountant) looking over your business’s accounts. An annual audit of your business may be a requirement of your business’s investors and lenders as a condition of putting their money in the business.

The audit requirements are different, depending on whether your business is public or private:

• Public: Businesses whose ownership and debt securities (stock shares and bonds) are traded in public markets in the United States are required to have annual audits by an independent CPA firm. (The federal securities laws of 1933 and 1934 require audits.)
• Private: Although federal law doesn’t require audits for private businesses, banks and other lenders to private businesses may insist on audited financial statements.