what does an audit committee do

what does an audit committee do -If the company broke the rules and accounting professional ethics, legal sanctions it can take it. It can deceive investors and lenders with false or misleading figures in its financial reports. This is the audit came in the audit is a means of misleading financial reporting to a minimum.

Auditing as highway traffic patrol officers to enforce the law, who sent the tickets to keep speeding to a minimum. The audit may reveal a problem, the business is not know.

Upon completion of the audit examination, certified public accountant to prepare a brief report that their business has prepared financial statements, under generally accepted accounting principle (GAAP) basis, or not. All of the company, is listed by an independent certified public accountants must have an annual audit. 

The listed company, its shares on the NYSE or Nasdaq must be audited by an external accounting firm.

For a listed company, to conduct an annual audit of the cost is a cost of doing business, its price will be paid to the public markets its funds and stock trading has its own in a public place.

Although federal law does not require audits for private enterprises, banks and other lenders may insist on private enterprise audited financial statements. If the lender does not require audited statements, business owners must decide whether the audit is a good investment.

On the contrary the audit, they can not really afford, many small enterprises have an external accounting firm came in regularly reviewing their accounting methods and give advice on the financial statements. 

However, unless the CPA audit done, he or she must be very careful not to comment on the external financial statements. If not carefully review the evidence to support the amount reported in the financial statements, certified public accountant is not qualified to give an opinion on the financial statements from the account of the business.