Financial Statements

A reasonable level of assurance that the financial statements are free of material errors, including errors resulting from fraud is the goal of audit planning.

An audit includes an assessment of the design and operation of checks and balances but only for the purpose of forming an opinion as to the material accuracy of the financial statements. The primary focus is whether the financial statements are misstated. An assessment of risks and the design and operation of procedures addressing those risks are not the primary focus of an audit.

CPAs are required to follow comprehensive standards when performing an audit of financial statements. These standards include examining, on a test basis, the evidence that supports the amounts on the financial statements and the other information that is presented in the form of notes to the financial statements.