Level of Assurance:
The Auditors' Report provides reasonable assurance to readers.
Incorporated businesses are legally required to present annual audited financial statements to shareholders. The law allows some smaller companies to waive an audit provided certain conditions are met.
An audit of financial statements by an independent expert may be required for various reasons. For example, a company's banker may require an audit to support an application for financing; an audit may be necessary when negotiating the purchase or sale of a business; or management or owners may find value in having an audit, particularly when performed by a Chartered Accountant such as one from an independant DNTW firm.
The auditor of a corporation is responsible to the shareholders. On behalf of the shareholders, the auditor examines the company's financial records and operations to determine whether the information reported in the financial statements is presented fairly. This assessment is communicated to the shareholders through the expression of the audit opinion.
It is important to remember that, in the end, management is responsible for the preparation and release of the financial statements.