Audits

Audits

Audits are a methodical review and objective examination of the financial statements, including the verification of specific information as determined by the auditor or as established by general practice.

Public companies need audits, or your lender or shareholders may require it. Our work includes a review of internal controls, testing of selected transactions, and communication with third parties.

Based on our findings, we issue a report on whether the financial statements are fairly stated and free of material misstatements.

Audits include inquiry/examination of:

• Your customers, to check outstanding receivable balances,
• Your banks, to confirm cash or debt balances and terms,
• Your vendors, to verify outstanding payable balances, and
• Your attorneys, for information on pending or threatened legal action.

We also perform physical inspections by observing your inventory counting methods and perform test counts. We document and test each operating cycle, including sales and cash receipts, expenses and cash disbursements, and payroll. Our audit papers include a detailed work program to document the examinations and testing performed, as well as the client's supporting work papers.

Audits Not Just for Public Entities

All public companies are required to have an annual audit, but some nonpublic entities must undergo an annual audit as well. These include local governments, not-for-profit agencies and other organizations receiving government grants.

Moreover, some financial institutions require audits of nonpublic companies based on the financing amount and/or the bank's assessment of the company's risk. Also, companies with absentee ownership (such as those owned by investment firms, or individuals who no longer run the business) may order audits as checks of their management teams.