What Is an Audit?

An audit is the highest level of attestation service. A CPA compiles and scrutinizes business records, including financial statements, and then forms an official opinion regarding how accurate they believe those records are and whether or not the mistakes they found were intentional.

Audits are most well known for being part of a large company’s or any nonprofit organization’s IRS compliance requirements. They allow the federal tax board to determine the legitimacy of reported numbers. However, the IRS is not the only group that will request this degree of attestation from a business. Financial lending institutions also require an audit from prospective lenders to prove that they have the means to pay the lender back.

The Auditing Process

The first step in any audit is to compile all the financial statements and records of the company applying for the loan. T. E. Lott & Company makes sure every item is included in the audit proceedings for accurate results.

Then, we carefully examine each document to ensure the accuracy of the reported information. If our firm finds an error, we make sure we find its source to determine whether the error was intentional. Additionally, banks are particularly interested in whether you actively make sure your financial statements match your bank account records, so T. E. Lott & Company looks for evidence of regular reconciliations. We will then interview management and take other investigative steps to make sure that the discoveries made regarding the statements are able to be explained.

Once we have gathered all of these details, T. E. Lott & Company can then submit a formal opinion to the bank. If the bank does approve the loan and you need to undergo lower-level attestation to maintain it in the future, we can also do reviews and compilations as requested by your lending institution.