Others who may be interested in viewing a company's financial statements are potential investor (to see how profitable the company is), the company's management team (to compare with previous years and keep track of company growth) and competitors (to compare the performance of other companies in the same industry).
If you're looking for investment, lenders and investors will usually want to see your financial statements before committing funds. Staff, particularly budget holders, should be familiar with financial statements too – to ensure financial responsibility is maintained across the business.
All companies must keep appropriate and adequate written financial records (s 286) and these records must correctly record and explain its transactions, financial performance and position and allow for 'true and fair' financial statements to be prepared and audited.
(2) A company shall allow every member or trustee of the holder of any debentures issued by the company to inspect the documents stated under sub-section (1) at its registered office during business hours.
Key Takeaways. Financial statements provide governments, investors, executives, and lenders with a picture of a company's financial activities and profitability.
The right to access such company records is set out in section 26 of the Companies Act, which provides that any person who holds or has a beneficial interest in the securities of a profit company has a right to have access to or to be furnished with a copy, of the annual financial statements of the company for their ...
The fair presentation of those financial statements is evaluated by independent auditors using a framework of generally accepted auditing standards (GAAS) which set out requirements and guidance on how to conduct an audit, also referred to simply as auditing standards.
Audited accounts are required for all companies that are not small companies. If your company meets any of these criteria, you are not required to have your accounts audited. However, there are some advantages to having your accounts audited, such as: Increased credibility with lenders and investors.
The primary responsibility for the financial statements rests with the reporting entity's management. Responsibility for preparation of the principal statements and notes, however, may be shared with the accounting organization responsible for maintaining the financial records of the reporting entity.
Users and Their Information Needs
The users of financial statements include present and potential investors, employees, lenders, suppliers and other trade creditors, customers, governments and their agencies and the public.
Internal and External Users
The external users may be classified further into users with direct financial interest – owners, investors, creditors; and users with indirect financial interest – government, employees, customers and the others.
Federal law does not prevent employers from asking about your financial information. But, the federal EEO laws do prohibit employers from illegally discriminating when using financial information to make employment decisions.
Under California law, financial service companies must get your permission first, before they can share your personal financial information with outside companies. This does not apply to sharing with outside companies that offer financial products or services.
Rating Agencies. A credit rating agency will need to review the financial statements in order to give a credit rating to the company as a whole or to its securities. Rating agencies conduct quite a detailed analysis, and so will need not just the basic set of financial statements, but also all accompanying disclosures.
The big question, though, is “How often do small businesses get audited?” According to WizTax.com, “Recent IRS data shows that they audit between less than 1% to 3% of business tax returns, with corporations and businesses making more than $100,000 being most likely to be audited.”
This includes Corporations, Companies, Partnerships, Sole Proprietorships, and Individual persons (self-employed), and those fitting the aforementioned criteria must submit to a yearly audit by a Certified Public Accountant.
a company carrying on any manufacturing, processing or trading activity has a branch office whose average of the quantum of activity during the relevant financial year does not exceed rupees two lakhs or two per cent of the average of the total turnover of the company including all its branch and other offices and the ...
04 The accountant performs primarily analytical procedures and in- quiries to obtain sufficient appropriate review evidence as the basis for a con- clusion on the financial statements as a whole, expressed in accordance with the requirements of this section.
How much does a financial statement review cost? The cost of a financial statement review generally ranges from $1,500 to $5,000. Many CPAs will include the review at the time your taxes are prepared and roll the cost together.
A CPA can obtain a level of “assurance” about whether the financial statements are in accordance with the financial reporting framework. The CPA obtains assurance by obtaining evidence.
Financial statements are only required for shareholders, and not available to the general public through the Secretary of State Business search.
Even if your company does not need to complete an audit, it must do so where shareholders who own at least 10% (either in number of shares or value of shares in the company) make a request in writing to the limited company's registered address within at least 1 month before the financial year end that the audit is ...
Financial information can be found on the company's web page in Investor Relations where Securities and Exchange Commission (SEC) and other company reports are often kept. The SEC has financial filings electronically available beginning in 1993/1994 free on their website.