An
audit is the most extensive service and is appropriate for entities
that must offer a higher level of assurance to outside parties. An
unqualified opinion from a CPA after an audit provides reasonable
assurance to outside parties that the entity’s financial statements
fairly present its financial position and results of operation in
accordance with certain accounting principles. During
an audit, the CPA examines the financial statements by confirming
balances with banks, creditors or vendors, completing physical
inspections and observations, and testing selected transactions by
examining supporting documents. By accumulating
this type of evidence, the CPA tries to reduce the risk that the
financial statements will be materially misstated. In
addition, an audit is planned and performed with an attitude of
professional skepticism in order to provide reasonable assurance that
material errors or fraud are detected. An audit does not, however, provide a guarantee of absolute assurance.
Other services: Compilations , reviews , and agreed-upon procedures
