- Home
- Bankruptcy and Bankruptcy Code
- Business Entities
- Departmental Operations
- Credit Practices
- Collection Practices
- Financial Analysis
- Accounting Concepts; Accounting Principles; GAAP; Generally Accepted Accounting Principles
- Accounts Receivable Forecasting
- Amortization of Assets
- Analysis By Sales
- Analysis by Trial Balance-Part I
- Analysis by Trial Balance-Part II
- Analysis by Trial Balance -Part III
- Assets
- Board of Directors' Audit Committees
- Audited Financial Statements; Financial Statement Analysis
- Consolidated Financial Statements
- Purpose of an Audit
- Auditor's Opinion Letter
- Understanding Balance Sheets
- Changing Independent Auditors
- Corporate Net Worth
- The Auditor's Opinion Letter
- Balance Sheet Ratios
- Financial Accounting Standards Board (FASB)
- Financial Problems; Red Flags; Signs of Financial Distress or Elevated Risk
- Financial Ratio Analysis
- Customer Financial Ratios; Ratio Analysis
- Adjustments to Financial Statement Made by the Credit Analyst
- GAAP (Generally Accepted Accounting Principles)
- The Going Concern Concept and the Auditor's Opinion Letter
- The Income Statement
- CPAs and Independent Auditors
- Industry Norms and Ratio Analysis
- Inventory Ratios
- Liabilities; Liability; Debt
- Limitations of Financial Statement Analysis
- Myths About Customer Financial Statement Analysis
- Net Worth
- Net Worth Ratios
- Notes to the Financial Statements, Explanatory Notes
- Reasons to Request Financial Statements
- Types of SEC Filings of Interest to Credit Analysts
- Securities and Exchange Commission
- Statement of Cash Flows
- Summarizing a Customer's Financial Condition
- Trend Analysis-Part I
- Trend Analysis - Part II
- Use and Abuse of Ratio Analysis
- Where-Got, Where-Gone Analysis
- Working Capital, Liquidity, Current Ratios, Ratio Analysis; Working Capital
- Working Capital Turnover
- Cash Flow, and the Cash Conversion Cycle
- Statement of Cash Flows; Accrual Basis vs. Cash Basis Accounting; Cash Basis of Accounting
- Comments about the Current Ratio
- Cash Application
- Contingent Liabilities
- How to Request Customer Financial Statements
- Financing Methods
- International Credit
- Laws and Regulations
- Payment Methods
- Performance Measures
- Security Instruments
- Career Management, and Job Change
- Credit Website Tools
- Upcoming Educational Events
- Credit and Collections Tools and Tips
- Tips on Creating Better Emails
- Generating Effective Credit Correspondence
- Exporting
- Accounting
Purpose of an Audit
An audit involves the systematic examination of records and documents and confirmation of the information they contain by physical inspection or other means to ensure that proper records are being kept and to determine financial statements or reports and the fairness of the facts they present as well as determining the degree of compliance with established policies relating to reporting of financial transactions including GAAP and SFAS.
An audit is intended to provide users with reasonable assurance that the financial statements fairly represent a company's financial condition. Audited financial statements do not guarantee accuracy. Auditors examine financial statements by conducting statistical sampling methods. Auditors and audits do not guarantee the statements presented are completely accurate. Auditors follow an audit trail, meaning that auditors are able to track data back to its source by using a step by step method. This technique is useful to auditors in verifying or validating the accuracy of the financial information being presented by the company being audited.
© 2011. Michael C. Dennis. All Rights Reserved. Please visit his website at www.coveringcredit.com