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    What does a external audit (financial statement) include for a company?

    © BrainMass Inc. brainmass.com December 24, 2021, 9:50 pm ad1c9bdddf
    https://brainmass.com/business/financial-statements/external-audit-financial-statement-include-company-417102

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    What does an external audit (financial statement) include for a company?

    An external audit includes is a review of the financial statements/reports of accompany or government. It is done by somebody not a part of the organization. They provide the entity an unbiased opinion. What they also give is they provide information to the organization that either do or do not verify the financial statements of the organization are accurate. What they are isn't accounting, but instead these audits are an independent review of the financial docs given to the auditor(s).

    For a private business, this type of audit often includes a review of the company's and yearly, quarterly or monthly finance reports and revenue and expenditure statements. This is done to display that they are correctly written and tabulated.

    External audits are typically conducted once a year at the end of the company's or government's fiscal year. They are performed after the entity's in-house bookkeepers prepare a year-end financial report, which is one of the documents verified in an external audit.

    For governments, this independent review will prove to taxpayers that budgets are being appropriately planned and the monies properly spent. In the private sector, external audits are important to investors because they provide an independent review of the company's finances.

    What the organization gets is a report displaying the auditor's findings. This will usually summarize the validness of the financial documents/statements that were provided by the charity, company or government. If there were mistakes they will be noted and suggestions to improve its finances will be given as well. Probably the most relevant item of an external audit is the conclusion that's determined. A favorable conclusion shows is unbiased evidence that the organization is displaying monetary data correctly and a negative conclusion is a warning of poor bookkeeping or accountings.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    © BrainMass Inc. brainmass.com December 24, 2021, 9:50 pm ad1c9bdddf>
    https://brainmass.com/business/financial-statements/external-audit-financial-statement-include-company-417102

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