A financial audit is an objective examination and evaluation of the financial statements of an organization to make sure that the financial records are a fair and accurate representation of the transactions they claim to represent.
Why is an audit of financial statements necessary?
Although an audit of your financial statements may make you feel like you’re under the spotlight, the process is intended to assure your stakeholders that management has provided a “true and fair” view of the business’s financial position. This confirms that your company’s financial processes are all above board – minimizing the risk of fraud – and that your accounting documents aren’t covering up for any financial mismanagement. However, it’s also important to note that financial statement audits can bring value to your business by identifying controls or processes that could be improved, thereby enhancing the quality of your business.
Cost of financial audit?
Costs of audit services can vary greatly dependent upon the nature of the entity, its transactions, industry, the condition of the financial records and financial statements, and the fee rates of the CPA firm. A commercial decision such as the setting of audit fees is handled by companies and their auditors.
What are different types of audit?
There are three main types of audits: external audits, internal audits, and Internal Revenue Service (IRS) audits. External audits are commonly performed by Certified Public Accounting (CPA) firms and result in an auditor's opinion which is included in the audit report.
What are the duties and responsibilities for an auditor?
· Diligently keep a systematic check on the company’s spending to improve organizational efficiency.
· Prepare balance sheets and audit statements.
· Prepare all documents related to finance.
· Conduct and attend regular meetings with senior management to share financial findings.
· Keep a check on processes and regulations, ensuring compliance with financial policies and regulations.
· Travel to client sites for auditory reviews and assessment.
· Provide a qualitative and quantitative evaluation based on empirical data findings.
· Work closely with the Director of Finance and the CFO to increase the financial efficiency of the company.
What Happens to Businesses That Don’t File Annual Reports?
The penalties for not filing an annual report, or filing one late, can range from paying fines to having your business dissolved. Please note that exact penalties will vary from state to state.
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Thank you for reading,
This blog is written by Priyanka Das. She works as an accounting intern at
Thaddeus. She chose Thaddeus because of its work environment and the mission it
stands for. She aspires to become a successful accountant.