As a private company, you may need a financial statement audit to satisfy the requirements of lenders, investors, or regulatory bodies. An audited financial statement provides a thorough and independent examination of your financial records, offering assurance that your financial reporting is accurate and compliant with Generally Accepted Accounting Principles (GAAP). It’s a deep dive into your company’s operations, from revenue to cash flow to expenses, with a seal of approval from a trusted auditing team.
In this post, we’ll cover the basic components of a financial statement so you can prepare for your audit.
What is an Audited Financial Statement?
A financial statement includes three essential documents every business likely already has on hand. It acts as an “at-a-glance” document for lending officers, investors, and other stakeholders to understand a company’s overall financial health. This document can help lenders quickly decide on loan applications or help board members understand revenue streams.
Depending on your business, audited financial statements may be required quarterly. While an in-house accountant can prepare your financial documents, an independent auditor must review an audited financial statement per GAAP.
The Components of a Financial Statement
Your in-house accounting professional must keep three essential financial document components up-to-date. Let’s take a look at each of these three documents and their purposes:
- The Balance Sheet: This document clearly defines and outlines a company’s assets, liabilities, and shareholders’ equity. It can help determine a company’s overall performance in conjunction with the other documents.
- The Income Statement: An income statement describes a company’s income streams and revenues.
- The Cash Flow Statement lists all expenses a company has incurred. It helps paint an accurate picture of its overhead and total revenue.
When you contact an auditing team to review your financial statements, your auditor will ask for copies of these documents. Regularly updating these documents is the best plan to avoid a last-minute scramble before an audit.
Assurance Dimensions: The Best Choice for Audits
Keeping your financial documents up-to-date is essential to set your company up for a successful audit. Whether you need audited financials for a loan application or to show your board members that your company is on track to success, it’s helpful to partner with an auditing team that understands the nuances of your business and industry.
At Assurance Dimensions, we pride ourselves on providing a “big firm” accounting excellence with a personalized touch. Our auditing professionals take the time to meet with you and understand your business needs and your need for private company audits. Plus, our remote auditing procedures make it convenient to meet virtually over our secure cloud-based software.
Contact us today to learn more about our audit and assurance services.
