A financial audit is a systematic process that involves reviewing and evaluating a company's financial records to ensure their accuracy and compliance with accounting standards. The audit is typically conducted by a team of qualified professionals, such as certified public accountants (CPAs), who follow a structured approach to assess a company's financial statements and internal controls.
The first step in conducting a financial audit is to establish the scope and objectives of the audit. This involves determining the specific areas of the company's financial records that will be reviewed and the goals that the audit aims to achieve. The audit team will also identify any potential risks or areas of concern that need to be addressed during the audit process.