What are Audited Financial Statements?

Audit of financial statements The audit of the financial statements of the audited unit. Its contents mainly include: (1) Whether the various financial statements of the audited unit are prepared in accordance with generally accepted accounting principles and a unified accounting system, and whether they follow consistent accounting principles. (2) Whether the various financial statements of the unit under review truly and fairly reflect its financial status and operating results during the period under review. An important stage in the development of modern financial auditing. From the world economic crisis of 1929-1933, a large number of companies went bankrupt or went bankrupt. From this, people realized that the balance sheet audit only centered on the static balance sheet, which reflects the financial status of the audited unit. Stakeholders of the enterprise judge the needs of the audited unit's business prospects and profitability. So the financial statement audit came into being. It focuses on the profit and loss statement reflecting the business prospects and profitability of the enterprise, and includes all the financial statements of the audited unit in the scope of the review. It does not focus on the balance sheet, as in the balance sheet audit, and only focuses on the static state of the financial status of the audited unit. Instead, it focuses on the profit and loss statement and the judgment of the company's current and future profitability. Whether the unit has consistently complied with generally accepted accounting principles and truly and fairly reflects the static financial status, changes in financial status and actual operating results of the audited unit in the financial statements. ^[1]

Audit of financial statements

Financial statement audit highlights:

1. Regular audit of financial statements

The audit of regular financial statements mainly includes whether the preparation of statements meets the required procedures and procedures; various statements such as master tables, schedules, notes and

Financial statement audit method:

1,

The overall objectives of the financial statement audit:

The purpose of the audit is to improve financial statements

The role and limitations of auditing financial statements:

Due to the inherent limitations of the audit, the CPA has drawn conclusions and formed

Notes in the audit of financial statements:

With the increasing size of modern enterprises, the risk of major errors in auditing financial statements has become an important part of the financial statement auditing procedures. When auditing the risk of material misstatement of financial statements, the following issues should be noted:

1. The audit of financial statements needs to clarify the scope and content of the audit. For the audit of major misstatement risks at the level of financial statements, the scope and specific content of the audit must be clear. This is the basis for auditing major misstatement risks at the level of financial statements.

2. Master the methods to effectively obtain the information related to the audit of major misstatement risks in the audit of financial statements. The scope of a material misstatement risk audit covers a wide range of issues, with various contents and varying degrees of complexity. Therefore, to obtain relevant information about a material misstatement risk audit of an audited entity, an appropriate method must be used. These methods include: inquiry, observation and inspection, analysis procedures and walk-through tests.

3. The audit of financial statements requires a reasonable assessment of the level of material misstatement risk. Reasonably assessing the level of significant misstatement risks at the statement level is a judgment process that minimizes audit costs and strives to reduce audit risks.

4. An audit of the financial statements requires the development of an overall response. Because the factors that affect the risk of material misstatement at the financial statement level are many, and each factor has a wide-ranging impact on the financial statement, in general, it is difficult to limit it to a specific identification. Therefore, after auditing the risk of material misstatement at the statement level, an overall response should be taken.

5. The audit of financial statements requires the design of further auditing procedures that identify the risks of material misstatement at a level that is significant. The risk of material misstatement at the financial statement level and the overall response measures taken have a significant impact on the implementation of further audit procedures. Therefore, the CPA should design further audit procedures for identifying ^[1] the level of significant misstatement risks to reduce inspection risks to acceptable levels.

6. The audit of financial statements should pay attention to the internal relationship between the two levels of major misstatement risk audits. Judging from the eventual appearance of a material misstatement, the risk of material misstatement at the financial statement level is related to certain types of transactions, account balances, and presentation determinations, and may also be related to multiple specific determinations. Therefore, we must pay attention to the internal relationship between the financial statement level and the identified level of material misstatement risk audits.