Financial statement audit is the process of examining an organization’s financial statements to ensure that they provide an accurate and reliable representation of the organization’s financial performance and position. The audit is conducted by an independent auditor, we are CPAs at LOB and can serve our clients in this service.
The purpose of a financial statement audit is to provide an opinion on the fairness and reliability of an organization’s financial statements. The auditor examines the financial statements to ensure that they are prepared in accordance with Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS), depending on the jurisdiction.
The audit process typically includes the following steps:
Planning
The auditor reviews the organization's financial statements and determines the scope of the audit, including which accounts and transactions will be audited.
Fieldwork
The auditor examines the organization's financial records and transactions to ensure that they are accurate and complete. This may involve reviewing supporting documents, conducting interviews with staff, and performing analytical procedures.
Reporting
The auditor prepares a report that summarizes the findings of the audit and provides an opinion on the fairness and reliability of the organization's financial statements. The report may also include recommendations for improving the organization's financial reporting processes.
The audit report typically includes an opinion on whether the financial statements present the organization’s financial position and performance fairly in accordance with GAAP or IFRS. If the auditor identifies any material misstatements or errors in the financial statements, these will be disclosed in the report.
A financial statement audit is an important tool for decision making for stakeholders such as investors, creditors, and regulators, as it provides assurance that an organization’s financial statements are accurate and reliable. It is also a regulatory requirement for publicly traded companies and many other organizations in many jurisdictions.
