Financial statement audit plan template, All businesses, whether private, public, or nonprofit, have to prepare financial statements in their own performance to provide fiscal accountability and accuracy to their stakeholders and people with an interest in the business. These statements enable management to make business decisions, enable creditors to evaluate loan programs, and provide individuals with information to make investment choices.
Financial statements provide information from a company’s accounting records about their economic assets and obligations on a specific date, in addition to their fiscal activities over a time period. These statements are usually prepared according to Generally Accepted Accounting Principles (GAAP), which will be the criteria issued by the American Institute of Certified Public Accountants (AICPA), but they may also be prepared on other comprehensive basis of accounting, such as cash basis or tax basis, based on the needs of the users.
Compiled financial statements offer lowest level of assurance. One of the chief reasons these are employed instead of different statements is for the timely launch of financial information about a company. Compiled statements really are a presentation of various financial reports and documentation, that’s the representation of management or owners of a company. Compilation standards permit the organization to omit note disclosures provided that there isn’t any intent to deceive the users. This is the only kind of financial statement which allows omitted disclosures.
The statement of cash flows reveals how fluctuations in the balance sheet and income statement affect cash and cash equivalents. It also demonstrates working, investing, and financing activities. The statement of cash flows helps investors and management determine the short term viability of a business, especially their ability to cover costs. As a CPA I examine these three financial statements and their supporting documentation provided by the company and assesses the overall accounting principles used. From this info I then create an audited financial statement which will include an opinion, either qualified or unqualified, concerning the nature of the financial documents.
In compiled financial statements, the organization, not the accountant, is accountable for its accuracy and completeness of their financial documents. Since the statements were not audited or reviewed, they are not certified by a Certified Public Accountant (CPA). No opinion or assurance is expressed in the accounts as to whether the accumulated statements are free from material misstatements or false/missing data or if they’re shown to be accurate, complete and reasonably presented to satisfy the needs of the US GAAP (Generally Accepted Accounting Principles).