Getting an unbiased opinion is always a good idea when it comes to things that really matter to you. Like your health. Or your finances. When your financial trustee has an unbiased external audit, you can be sure that their financial statements are accurate and they have a lower risk of fraud.
An external auditor works independently from a financial advisor and is an impartial accountant with no conflicts of interest. This unbiased, impartiality makes certain that companies are in compliance with tax laws and that their business records are complete.
What Does an External Auditor Do?
External auditors verify that financial statements are truthful and make sure everything is prepared within the framework of GAAP (Generally Accepted Accounting Principles). Additionally, they also evaluate the internal controls that manage risks which could affect a company’s financial accounts.
Typically, an external auditor will want to see:
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Primary Records of Account: General ledger (if kept), bank statements, petty cash records, invoices, book of receipts for money received
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Schedules: Fixed assets list, schedule of creditors and debtors
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Summaries and Reconciliation Statements: Bank reconciliation statements for all accounts, petty cash reconciliation statement, stock sheets
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Formal Confirmation: Official letter from banks to confirm balances
Why Financial Analysts Should Audit Themselves
An audit is a close inspection of a business or person's financial records to ensure they are accurate. For companies that provide financial advice and planning, it is critical that they hire an external auditor in addition to auditing themselves internally to verify that they are operating at the highest of standards.
Internal Audit
Conducting regular internal audits is important for many reasons, including verifying financial records, evaluating internal controls, detecting fraud, and increasing the efficiency of a company’s operations. Although internal auditors are employees at their own company and report to the Board of Directors’ Audit Committee, they don’t usually audit their own departments.
Internal audits look at key risks facing a business and what is being done to manage those risks effectively to help an organization achieve its objectives. The main goal? Identify control problems and correct lapses in advance of an external audit.
Credibility
Although a company will hire an external auditor firm, the firm doesn’t work directly for the financial analysts. The external auditor’s prime objective is to provide an independent examination of a company’s financial statements without bias, unhindered by personal loyalties. This gives them credibility and lets you, the customer, know if a business is able to handle your family affairs accurately, professionally and in confidence.
About Caldwell Trust Company
Caldwell Trust Company is an independent trust company with offices in Venice and Sarasota, Florida. Established in 1993, the firm currently manages over $800 million in assets for clients throughout the United States. The company offers a full range of fiduciary services to individuals, including services as trustee, custodian, investment adviser, financial manager and personal representative. Additionally, Caldwell manages 401(k) and 403(b) qualified retirement plans for employers.
