Do you choose a CPA or auditor? Any company whose stock is sold to the public is subject to the reporting requirements of the Securities & Exchange Commission, which include having its financial statements audited by an independent certified public accountant. Whereas companies, whose stock is not sold to the public, are not subject to such reporting requirements. But many such companies have an annual audit of their financial statements performed because one of the following may require it:
Owners may require one to satisfy themselves that the data provided by the company’s financial staff is “materially correct.”
It should be understood that an audit does not guarantee that the financial statements are 100 percent “correct” but rather that they are “materially correct and not misleading.” Also, the audit is not intended to detect fraud.
Selecting an auditor (CPA) is an important task for a company, as the CPA can be a valuable resource for information, and such relationships generally last for years. But privately-owned companies rarely use the 4 largest international (Big 4) certified public accounting firms; particularly if the company revenues are under $100 million. This is because the fees commanded by these firms who perform most of the audits of the world’s publicly owned companies would be too expensive.
Consider the following factors when choosing from the remaining firms:
Keep in mind that Bigger does not necessarily mean BETTER SERVICE for your company.
Determine which CPA or auditor are the right fit for your company using our 5 Guiding Principles For Recruiting a Star-Quality Team.
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