The Importance of Audited Financial Statement

At first, financial statement is helpful for users no matter internal users or external users and they need to go through the financial statement to check the sustainability of the specific company. Therefore, an audited financial statement can leads accuracy of the information or statement in financial statement make users feels that can fully trust and rely on the information which is audited.

Why an audited financial statement is importance of a business firm?

Firstly, audited financial statement is able to determine the reliability of information. Every business is required to appointed auditors to analyze their financial statement of company that auditors in order to form an opinion about their financial well-being. Moreover, as auditors stand responsible for their role and tasks, they will consider an organization will put funds at risk with the business. Since auditors have the right to subject the financial statement, therefore auditors are purposely to do that which is investigation. Company need to face rigorous professional examination where auditors prudently go through the company’s books and records which is information. Furthermore, conduct an external audit by a qualified public accounting firm will satisfy most questions about the reliability of its financial.

Secondly, companies are required by law to issue audited financial statements and the audited financial statement is either to satisfy the requirement of certain external or internal users, bank, investment firms and includes in lieu of employing internal auditors. By the way, the board of directors are responsible to go through selection of auditors that hire an auditing team based on it solely name and ensure that it is well-qualified and has experience in the company's industry when company plans to conduct an audit. Moreover, conducting an audit of financial statement is considered a matter of planning which is the process of observation, inquiry and inspection of internal financial books and records. Auditors undertake various tests, such as requesting confirmations of orders from a sampling of customers, to prove the accuracy of items in the financial statements and etc.

Lastly, audited financial statement is important because auditors have to conduct an audit opinion based on the audited financial statement to prove the current condition of the specific company. Auditors are taking different period to fully audited a company depends on the size and complexity of the company being examined. After audited the financial statement of company, auditors will found out whether the company have obey the standard of GAAP or not and state in the audit report which includes audit opinion. Furthermore, there are few types of audit opinions include unqualified opinion and qualified opinion to determine the condition of company. As information, unqualified opinion means that materials were in order and met all auditing requirements and qualified opinion is means the statements do not accurately reflect the company's condition or company didn’t obey the required standards.

Reference below:

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