How to Review Financial Statements Effectively and Efficiently

Most CPA firms create financial statements for their clients. This blog post tells you how to review financial statements efficiently and effectively.

How to Proof the Financial Statements

The evidence of the accounts. Until the collaborator or boss analysis, the proofer typically does the following:

  • All sentences, notes, plans are included (foot the numbers for).
  • Numbers like the following are considered for  tick and tie:

1) Net reserves correspond to total liabilities and equities.

2) Capital on the balance sheet is accepted at the end of the cash flow statement.

           3) Net benefit from the refund corresponds with the starting amount of the cash flow statement for an indirect approach.

  • Notes number coincides with financial statements
  • The extra timetable numbers agree to the financial statement.
  • Compliance with the norm in business formatting financial statements
  • Use Grammarly for better grammar and punctuation
  • Compare all pages of the study with the contents page
  • Cross-check the number of pages.

Partner or Manager Review

  • In end, the Employee or Manager the accounts. If the proofer takes his job, the revision period for this final analysis will be minimized. Some of the Tips for the final review are given below:
  • The entire bundle of financial reports to give a general understanding of the report’s structure e.g. the Yellow Book report, additional statistics, market, etc. are all scanned.
  • Read the first section of the overview of practical accounting policies, taking into consideration the reporting framework (e.g., GAAP), form of organization (non-profit), and whether the financial accounts are merged or mixed, thereby providing an early background to the remaining financial analysis.
  • Read the viewpoint or article acknowledging some nonstandard vocabulary (e.g., going concern paragraph) (e.g., going concern paragraph)
  • Agree called financial reporting titles in the opinion or report to the financial statements
  • In the opinion or report, settle on the dates (e.g. year-end) and compare them
  • Compare the opinion or report on the supporting survey report (as given by the employee and above)
  • Contrast the date of the letter of representation or the date of the evaluation study
  • Review the balance sheet of the line products with relevant notes (retain those thoughts for a review of the notes).
  • Check the statement of profits
  • Check the adjustments in shareholdings declaration (if applicable)
  • Check the cash flow statement
  • Check notes; make mental notes about sensitive or relevant information so that you can see later if there are connections to these notes in the correspondence with those responsible for governance.
  • Now once again have a look at the balance sheet to check in case if it needs any disclosures.
  • Review of additional details (and related opinion for this information if applicable)
  • Other findings, including Yellow Book and single audit, should be checked (Supporting files should be added by some staff member working on the file; in case of a problem we should be able to refer to the examples)
  • When a copy of the statements is printed, use the yellow highlighter to mark the parts and numbers that have been checked.
  • When a document analysis is completed, pencil in corrections and provide the staff member with corrected pages for revisions.
  • When you search on the machine, take pages requiring correction and provide the employee with a screenshot of them
  • Instead, right track adjustments when you are in a Word document for the financial statements; these changes will be in a different color, allowing you to see clearly what has changed; and Word would provide each person, who makes an adjustment with a different shade so that you can see who has modified what.

The final move

  • Do not delete all drafts – or leave them in the file at least. There is no need to keep drafts until the financial statements are finished.

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