The pros at SPOTON realize the least favorite word a business can hear is audit. An audit is only an examination of a business’ financial statements and disclosures. This is audit can be by an independent auditor, such as SPOTON Accounting. The result of this examination is a report by the auditor. This is an agreement to the fairness of the financial statements and disclosures. The auditor’s report must go along with the financial statements. This is a good way to ensure your business or organization is being run the right way.
The purpose of a financial statement audit is to add credibility to the business. The SEC requires publicly held entities to file annual reports for audit. Many lenders also want audits of financial statements before lending funds. Suppliers may want audited statements before they will be willing to extend credit.
An audit is the most expensive of all the types of examination of financial statements. The least expensive is a compilation, followed by a review. Due to its costs, many companies attempt to downgrade to a review or compilation. This is the only option if it is acceptable to report recipients. Public entities must have their quarterly financial statements reviewed. If you have questions about which exam you need, please contact SPOTON Accounting.