An audit gives reasonable assurance on the accuracy of the financial statements and their compliance with generally accepted accounting principals. The CPA expresses an opinion on the material presentation of the financial statements to the authority requesting the audit. Audits involve obtaining an understanding of internal control and assessing control risk, assessing fraud risk, tests of accounting records and of responses to inquiries by obtaining corroborating evidential matter. Certain other procedures may also be performed during an audit as required for specific industry or organizational compliance.
Here are some reasons why an audit is done:
- Government agency requirement
- Loan covenant requirement
- Employee benefit plan requirement
- Peace of mind for the owner/shareholders
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