Tag Archives | audit process

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How Nonfinancial Information Helps Auditors

Every financial transaction your company records generates nonfinancial data that doesn’t have a dollar value assigned to it. Though auditors may spend most of their time analyzing financial records, nonfinancial data can also help them analyze your business from multiple angles. Gathering audit evidence The purpose of an audit is to determine whether your financial […]

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Auditing Cashless Transactions

Like most businesses, you’ve probably experienced a significant increase in the number of customers who prefer to make cashless payments. And you may be wondering: How does the acceptance of these types of transactions affect the auditing of your financial statements? Cashless transactions require the exchange of digital information to facilitate payments. Instead of focusing […]

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How Auditors Assess Risk When Preparing Financial Statements

Every year, your audit firm will conduct a fresh risk assessment before the start of fieldwork. Why? Because your auditor wants to mitigate the risk of expressing an incorrect opinion regarding the accuracy and integrity of the company’s financial statements. Inadvertently signing off on financial statements that contain material misstatements can open a Pandora’s box […]

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Income Statement Items Warrant Your Auditor’s Attention

Today’s auditors spend significant time determining whether amounts claimed on the income statement capture the company’s financial performance during the reporting period. Here are some income statement categories that auditors focus on. Revenue Revenue recognition can be complex. Under current accounting rules, companies follow a patchwork of industry-specific guidance. So, companies in different industries may […]

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5 Common Sources of Substantive Audit Evidence

Do you understand how auditors verify account balances and transactions? This knowledge can minimize disruptions when the audit team visits your facilities and maximize the effectiveness of your audit. Here’s a list of five common sources of “substantive evidence” that auditors gather to help them form an opinion regarding your financial statements. 1. Confirmation letters. […]

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Demystifying the Audit Process

Independent auditors provide many benefits to business owners and management: They can help uncover errors in your financials, identify material weaknesses in your internal controls, and increase the level of confidence lenders and other stakeholders have in your financial reporting. But many companies are unclear about what to expect during a financial statement audit. Here’s […]

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