What is an audit?

If a company accounting and ethical rules are broken, it can be to be liable to legal penalties. It may be her investors and lenders with false or misleading numbers mislead deliberately in its financial report. This is where the audits. Audits are a way to hold misleading financial reporting to a minimum. CPA Auditors highway patrol officers to the enforcement of traffic laws and issue tickets for speeding up to a minimum. An audit examination can identify problems that the company was not aware of.

After completing a review of research, the CPA prepares a short report which says that the company has prepared its financial statements in accordance with the generally accepted accounting principles (GAAP), or if it has not. All companies listed must have annual audits by independent CPAS. Companies whose shares are quoted on the New York Stock Exchange or Nasdaq audited by external companies in CPA. For a public company is the cost to carry out an annual inspection, the cost of doing business. It is the price that a company pays to go into the public markets of the capital and the fact that its shares are traded on public space.

Federal law does not require an audit of private enterprises, banks and other lenders insist to private companies on the audited financial statements. If lenders are not audited statements required by an entrepreneur to decide if an audit is a good investment. Instead of an audit advice they don't really, many smaller businesses an outside CPA come regularly review its accounting methods and advise on their financial reporting. But if not a CPA has done a revision, he or she has to be very careful not to mention the external financial reports. But a careful examination of the justification of the amounts recognised in the financial statements is the CPA was able to deliver an opinion on the financial statements of the company's accounts.

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