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What is an audit?

What is an audit?

If a company accounting and ethics rules breaks down, it may be liable to legal sanctions against it. It can be its investors and lenders with numbers of false or misleading intentionally mislead its financial report. This is where checks. Audits are a way to eliminate misleading financial reporting to reduce to a minimum. CPA Auditors are as agents of patrol road that respect for traffic rules and issue tickets to reduce to a minimum. A review of audit can detect the problems that the company was unaware of.

After completing the review of the audit, the CPA prepares a short report which States that the company has prepared its financial statements according to generally accepted accounting principles (GAAP) or when he is not. All listed companies are to have annual audits by independent CPAS. These companies whose shares are listed on the New York Stock Exchange or the Nasdaq will be audited by external CPA firms. For a listed company is the cost of an annual audit the costs of doing business. It is the price that a company pays to enter the public markets of the capital and the fact that its shares traded in the public room.

Although federal law requires no audits for private companies, banks and other lenders to private insist on audited financial companies. If the required lenders unchecked statements with a business owners to decide whether an audit is a good investment. Instead of an audit, they can hardly afford, many small businesses an outside CPA come regularly to look over their accounting methods and give advice on their financial reports. But unless a CPA conducted an audit, he or she must be very careful to not mention the external financial statements. Without a careful review of the evidence in support of the amounts indicated in the annual accounts, the CPA is not able to give an opinion on the annual accounts of the company accounts.

What is an audit? - Internet Business Online News


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