We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What are Audited Financial Statements?

Malcolm Tatum
By
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

As part of the financial accountability that most entities provide to investors, board members, and constituents, the use of audited financial statements are common. Essentially, these statements are simply the accounting documents that are prepared by a certified public accountant (CPA) on behalf of a business or non-profit organization.

The source documents for the audited financial statements are usually provided by the organization wishing to have an auditor prepare a financial statement. This will often include a wide range of documents, such as accounts payable and receivable information, expense reports, budgets, and any other type of financial record that the organization has in its possession. The accountant will take these various financial statements, evaluate and cross-reference them, and provide a professionally prepared statement that the organization can then present to interested parties.

Audited financial statements usually include a document that is referred to as an opinion. It is the responsibility of the accountant to provide either an unqualified opinion or a qualified opinion. An unqualified opinion basically states that in reviewing the documents submitted by the organization, the accountant is in agreement with the methods used to prepare those documents. In effect, the accountant is stating that the audit is accurate and complete.

By rendering a qualified opinion, the accountant indicates that he or she is not in agreement with the methods used to prepare the supporting financial documents. This does not necessarily mean that the accountant thinks something unethical is happening. It could, however, mean that the accountant found instances where expenses should have been assigned to a different category, or there was some errors found in line items, such as transposed digits.

Once in a great while, an accountant does not feel free to render an opinion. This may mean that the records supplied were insufficient to prepare proper statements, or that there were a number of issues that would have to be addressed before the accountant would be able to evaluate the accuracy of the information provided. Generally, when an accountant declines to issue an opinion, the organization needs to retool its internal accounting procedures so that it can operate according to the usual and proper accounting standards.

Audited financial statements are often prepared on an annual basis, and are presented to persons or groups who have an ongoing interest in the organization. Businesses typically make them available to investors, upper level management, and the board of directors. Non profit organizations may choose to share the statements with members, the operating staff, key departmental managers, and other the members of whatever governing body exists within the organization.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Malcolm Tatum
By Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including SmartCapitalMind, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.
Discussion Comments
By Melonlity — On Feb 07, 2014

That brings up a point about board meetings -- motions are made to submit financial reports to audit and are not made to approve them. An executive board can review financial statements, but it's usually the accountants who determine if they are "proper" or not.

Malcolm Tatum
Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
Learn more
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.