Unaudited financial statements provide a snapshot of a company’s financial status and performance at a specific point in time. Unlike audited financial statements, which are subject to an independent review by an external auditor, unaudited financial statements are prepared by the company’s management without an independent review. As a result, unaudited financial statements may contain errors or omissions that could potentially impact their reliability. However, unaudited financial statements can be useful for internal decision-making and for providing information to external stakeholders, such as investors and creditors.
Unaudited Financial Statements: What’s Included
Unaudited financial statements are financial statements that have not been reviewed or verified by an independent auditor. They provide a snapshot of a company’s financial performance and position, but they do not have the same level of assurance as audited financial statements.
Unaudited financial statements typically include the following:
- Balance sheet
- Income statement
- Statement of cash flows
- Statement of changes in equity
Unaudited financial statements may also include footnotes and other supplementary information.
Unaudited financial statements can be useful for a variety of purposes, such as:
- Providing a general overview of a company’s financial performance
- Making comparisons to other companies
- Identifying trends in a company’s financial performance
- Making informed investment decisions
Circumstances That May Lead to Unaudited Statements
There are a number of circumstances that may lead a company to issue unaudited financial statements. These include:
| Circumstance | Explanation |
|---|---|
| Small size | Smaller companies often do not have the resources to hire an auditor to review their financial statements. |
| Limited use | If a company’s financial statements are not going to be used for external purposes, such as raising capital, it may not need to have them audited. |
| Timeliness | Unaudited financial statements can be prepared more quickly than audited financial statements. This can be important for companies that need to provide financial information to investors or creditors on a timely basis. |
Well, there you have it folks, a quick and easy rundown of what’s included in those unaudited financial statements. We hope this has been helpful in shedding some light on the matter. Thanks for tagging along, and don’t be shy to pop back in later for more financial wisdom. We’re always here to help you make sense of the numbers!