Archive: August 2018

Numerous forms of financial statement accountability evaluations exist and, with some being so similar, it is vital to discern the difference between them when deciding which is appropriate for your business or nonprofit entity. Two evaluations, the financial audit and the financial statement review, are so similar in nature that it’s important to understand the differences. The primary differences between financial audits and reviews are the level of assurance, the reliance on company management, the work performed, and the need to understand internal controls.

For business owners who have hired a CPA or Audit Firm to conduct an independent audit of your financial statements for the first time, the results can be deceiving. Whether your organization is required to perform an annual audit, seeking a merger or acquisition, approaching an IPO, or seeking a business loan, navigating an independent auditor’s report can be slightly confusing. An unqualified opinion, which seems like it would be a bad thing, is actually the best result that you can get, stating that your company has followed all GAAP guidelines and your financial statements are free of any material misstatements. On the other hand, a qualified opinion states the opposite: either the financial statements of your organization contain misstatements, or the auditor is unable to obtain evidence regarding a certain account balance. It’s important to note that the misstatements shouldn’t have a pervasive effect on your financial statement.  The primary question we want to answer today, however, is what to do after receiving a qualified opinion.