Audited financial accounts relate to financial statements that have been independently audited by an independent auditor and are deemed to be accurate and fair.
The management of the firm is responsible for the creation of the financial statements and disclosures that go along with them.
As a result, external auditors of the business verify and audit the financial statements that have been audited and then issue an opinion based on their findings, which is known as an external audit. Following are the Audited Financial Statement:
- Accounting records are scrutinized, assessed, and a verdict is rendered on the financial statement.
- Accounting records must be accurate and full, and financial system and transaction auditing examines compliance with key laws and regulations that affect this.
- Internal control and the internal audit function are examined to ensure that assets and resources are protected and that accounting records are accurate and complete.
- Investors and economists rely on audited financial statements to assess a company’s health and the health of the broader economy.
Audited financial statements serve the following purpose:
Independent assurance that management’s financial performance and position in the financial statements they have generated are intended to present an accurate and fair view of the company’s financial performance and condition, according to the basic notion of audited financial statements
The audit ensures that the company’s financial transactions are appropriately recorded in the company’s records. Larger organizations and public corporations, on the other hand, may undergo dozens or even hundreds of audits throughout the course of a year or fiscal year, depending on their size.
- There are two basic types of audits.
- A kind of auditing that takes place inside a company is known as internal auditing.
A third-party examination
In order to guarantee that the company’s internal controls are working properly, the internal audit department is responsible for performing a review of them. Their primary responsibility is to the company’s senior management. Employees for a company are, in fact, workers for a corporation.
An audit by an external auditor is undertaken by an independent and registered firm or corporation at the request of the company’s shareholders.
The management of the organization is also not compelled to receive any reports from these individuals. The words “audit report” and “audited financial statements” refer to the report and the financial statements, respectively, on which they express their opinion.
Features of audited financial statements
The following are the most critical characteristics of:
An audited financial statement’s credibility is its most significant quality. A definition of accountability is the assurance given by a third party that the financial statements of an organization correctly depict the organization’s real financial position.
You may rely on the audited financial statements to make decisions based on the information contained therein.
Accuracy and currentness are two additional characteristics of an audited financial statement. As a company shareholder, you may be certain that the audited financial statements will be complete and accurate, with no omitted assets, liabilities, expenses, or revenues.
Conclusion
There’s little doubt that audited financial statements are a reliable source for information about a company’s financial health and operational performance. There will be no overstated or underestimated charges in the future, either. This may cause you to make a poor decision.
