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Most people think they know what a financial audit is. Most people are wrong. There is a wide gap between the truth about audits and the perceptions of boards and management. Below are some of the most common:

The audit is intended to discover fraud.
The audit is intended to discover material fraud or any other material misstatement regardless of its cause. The auditorís contract with the client specifically states that the audit is not intended to discover fraud. It is the responsibility of management to put controls in place to deter fraud or in the alternative to discover it. Focus Accounting Solutions, Inc. can help design a program of internal controls which will help to discourage fraud and if perpetrated uncover it.

It is part of the auditorís job to clean up my books.
The auditors are engaged to audit your financial statements. Part of this process is to audit the underlying account balances in the general ledger through the review of a sampling of transactions, analytical review of account balances and confirmations from outside sources. It is the organizationís responsibility to put its own books in order. The ideal audit would result in no adjustments of the books. A large number of audit adjustments indicate that the general ledger account balances were not in good order. A lot of adjustments also suggest that monthly financial statements have been incorrect. Your decisions during the year may have been different if you had better numbers. Focus Accounting Solutions can help put your books in order. This will speed up the audit and lower its cost.

It is part of the auditorís job to prepare my organizationís financial statements and footnotes.
There are many choices available when converting general ledger balances into financial statements prepared according to Generally Accepted Accounting Standards (GAAP.) While your auditor can make suggestions as to just what your choices are, it is managementís decision to determine the level of disclosure. Focus Accounting Solutions has extensive experience in what is appropriate and what will communicate the organization financial information is the best light.

 


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