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An audit is the highest level of assurance that your financial statements are correct - presenting your financial position, results of operations and cash flows in accordance with US Generally Accepted Accounting Principles, or another basis of accounting. An audit is appropriate for businesses that must offer a higher level of assurance to outside parties. During an audit your financial statements are examined, accounts are confirmed with third parties, physical inspections and observations are conducted, and testing is performed on selected transactions through the review of supporting documents.
Note that for an audit:
  • The CPA must be independent; &
  • The report must include all required disclosures.