An audited financial statement is a set of financial documents that have undergone examination and verification by an independent auditor. This audit process involves a thorough review of the company’s financial records, transactions, and internal controls to ensure that the financial statements present a true and fair view of the company’s financial position and performance.
Key features of audited financial statements include:
- Independent Verification: Audited financial statements are verified by an external auditor who is independent of the company. This independence ensures objectivity and credibility in the auditing process.
- Compliance with Accounting Standards: Audited financial statements must comply with generally accepted accounting principles (GAAP) or international financial reporting standards (IFRS), depending on the reporting framework applicable to the company.
- Assurance of Accuracy and Reliability: The audit process assures stakeholders, such as investors, lenders, and regulators, that the financial information presented in the statements is accurate, reliable, and free from material misstatements or errors.
- Opinion of the Auditor: Upon completion of the audit, the auditor issues an audit report expressing their opinion on whether the financial statements are presented fairly in all material respects following the applicable financial reporting framework. The auditor’s opinion can be unqualified (clean), qualified, adverse, or a disclaimer, depending on the findings of the audit.