Series 65: 1.4.4. Accounting Fundamentals

1.4.4. Accounting Fundamentals

Companies that file reports with the SEC must include financial statements that have been audited by an independent certified public accountant. The accountant examines the financial statements and writes a report with an opinion as to whether the financial statements were presented fairly and comply with Generally Accepted Accounting Principles (GAAP). The purpose of the audit is to provide assurance to the public (and especially current and potential shareholders) that the financial statements can be relied upon. Companies’ annual financial statements, included in their 10-Ks, must be audited. Companies’