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ROC Audited Financials

ROC Audited Financials

 

What is Audited Financial?

 

An audited financial statement is any financial statement that a certified public accountant (CPA) has audited. When a CPA audits a financial statement, they will ensure that the statement adheres to general accounting principles and auditing standards. Without this CPA verification, inventors and lenders may not be confident that the statement you’re presenting is accurate.

 

Who should prepare?

 

It is the responsibility of the company’s management is to prepare the company’s financial statements and related disclosures. Any company presenting its financials to investors or lenders should prepare audited financial statements. The vast majority of potential funders for your company will request audited financial statements instead of unaudited ones since the latter leaves far less room for error.

 

An audited financial statement is any financial statement that a certified public accountant (CPA) has audited. When a CPA audits a financial statement, they will ensure that the statement adheres to general accounting principles and auditing standards. Without this CPA verification, inventors and lenders may not be confident that the statement you’re presenting is accurate

 

When has to be done?

A company is required to prepare its annual financial statements within six months after the end of its financial year, or such shorter period as may be appropriate to provide the required notice of an annual general meeting.

 

Types of audited financial statements

 

There are four primary types of financial statements that may merit auditing:

  • Balance sheet. A balance sheet details your company’s total assets, shareholder equity and debts at a given point in time. It is often thought of as a snapshot of your company’s performance.
  • Cash flow statement. A cash flow statement details the amounts of cash and cash equivalents moving in and out of your company’s bank accounts. Cash equivalents include overdrafts, bank deposits, cash-convertible assets and short-term investments. For this type of statement, cash includes both cash available on hand and money stored in demand deposits.
  • Income statement. An income statement, also known as a profit and loss statement, details your company’s revenue after all expenses and losses. Whereas a balance sheet is a snapshot of your company’s performance, an income statement captures that performance over an extended period. It usually includes metrics such as gross profits, net earnings, revenue, expenses, cost of goods sold, taxes and pre-tax earnings.
  • Statement of shareholder equity. While often included as a portion of the balance sheet, the statement of shareholder equity can be prepared separately as well. It details all changes to your company’s value to shareholders during an accounting period. Increasing equity indicates good business practices while decreasing equity may indicate the opposite.