The Importance of AuditingAuditing typically refers to an objective review of a company’s financial statements, which consists of the cash flow statement, the income statement and the balance sheet. It analyzes the level of accuracy that the business has characterized its financial records. The process looks at how a business documents investing, financing and operating ventures.Depending on the type of audit and what it aims to accomplish, it can be conducted by internal employees or independent, third-party examiners like a Certified Public Accountant (CPA) firm or a government agency such [...]

Financial accounting is how accounting professionals document, compile and outline how a business performs financially over a discrete period of time. Unlike cost accounting, which is used primarily for internal short and long-term strategic planning, financial accounting focuses primarily on producing relevant documentation for outside parties interested in short- and long-term financial performance.Small businesses, large corporations and nonprofits use the following financial statements produced for relevant parties: the Balance Sheet, the Cash Flow Statement and the Income Statement. When it comes to publicly traded companies, their financial accounting standards are [...]