Audit and Assurance

An audit is the highest level of financial statement service a CPA can provide. The purpose of having an audit is to provide financial statement users with an opinion by the auditor on whether the financial statements are prepared in accordance with the proper financial reporting framework. An audit enhances the degree of confidence that intended users, such as lenders or investors, can place in the financial statements.
The auditor obtains reasonable assurance about whether the financial statements as a whole are free from material misstatement, and whether the misstatements are from error or fraud. To obtain reasonable assurance, items are observed, tested, confirmed, compared or traced based on the auditor’s judgment of their materiality and risk. After gathering appropriate evidence through this process, the auditor issues an opinion about whether the financial statements are free from material misstatement.
MCBC INC. will talk to management about their observations and findings during the audit to help the business improve its compliance and performance.
An audited financial statement is an invaluable tool for obtaining financing, negotiating long-term credit and reporting to investors, lenders and regulatory agencies.
An audit is the most comprehensive assessment of the presentation of financial data. It entails assessing risks, examining, on a test basis, evidence supporting amounts and disclosures in the financial statements, assessing the accounting principles used and evaluating the overall financial statement presentation of the company.
As an additional benefit, the auditor may become aware of some deficiencies in internal control or weaknesses in the organization’s systems and offer suggestions for improvement. Some of the more important auditing procedures include:

• Inquiring of management and others to gain an understanding of the organization itself, including operations, financial reporting and known fraud or error.
• Evaluating and understanding the internal control system.
• Performing analytical procedures as expected or unexpected variances in account balances or classes of transactions appear.
• Testing documentation supporting account balances or classes of transactions.
• Observing the physical inventory count.
• Confirming accounts receivable and other accounts with a third party

The auditor’s report is recommended when there are many users of financial statements and when decision-making requires reliable financial statements. With an audit, you will benefit from the opinion issued by a CPA auditor who can guide you and give you advices in order to improve your strategy and make appropriate financial decisions to reach your goals.
Due to the level of work performed, the cost of an audit can be significantly higher than a review engagement. An audit report may be a requirement set by the lender, third parties who rely on the financial statements such as a prospective purchaser or other.