Audits

Audited financial statements provide the highest level of assurance that financial statements are presented fairly in conformity with generally accepted accounting principles.

An audit engagement utilizes procedures such as confirmation with outside parties (i.e. banks, customers, and vendors); observation physical inventories; and testing of selected transactions by examining supporting documents. In addition, in an audit engagement the CPA focuses on the entity’s control environment and must consider the risk of fraud.

 

Sample Audit Opinion

We have audited the accompanying balance sheet of ABC Company as of December 31, 20XX, and the related statements of income, retained earnings, and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ABC Company as of December 31, 20XX, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.