One of the two principal sets of audits, a financial audit refers to a full examination of the accounting records of a business entity.
All businesses should have internal controls to deter fraud, detect theft, and preserve assets. Of all the assets, cash is the easiest to misappropriate. Effective internal controls for cash prevent the proverbial hand in the cookie jar.
An audit is defined as a methodical examination. Audits are grouped into two principal sets – financial and organizational compliance (usually related to licensure). For the small business entrepreneur, it is almost unheard of for them to have an organizational compliance audit.
