Business auditing

What is a business audit? A business audit is a documented evaluation of whether or not a company’s financial statements are materially correct along with the standards, evidence, and assumptions used to conduct the audit. The results are reported in a written audit opinion, and the language in the opinion defines an audit. An auditor reports on several topics: Financial statements : An auditor reports whether or not the financial statements are free of material misstatement. In this context, the word “material” means an error or missing information that is large enough to impact the reader’s opinion of the financial statements. An audit is designed to identify financial statement errors. Regulatory requirements : The financial statements must be prepared based on a set of accounting rules. For-profit businesses in the U.S. must use Generally Accepted Accounting Principles (GAAP), while governmental and not-for-profit firms use different sets of accounting rules. The audit opinion