How do auditors verify the accuracy of financial statements?

[jasminsain]

During an audit, what procedures do auditors follow to ensure that financial statements are fair and accurate? Do they check every transaction or rely on sampling?

 

[Sunita]

Auditors don’t check every transaction — they use sampling and risk-based procedures. They:

1. Assess internal controls and key risk areas.
2. Test samples of transactions and account balances.
3. Confirm balances with third parties (e.g., banks, customers).
4. Review supporting documents and analytical trends.
5. Evaluate estimates and disclosures for fairness.

Goal: to give reasonable assurance, not absolute certainty, that the financial statements are accurate.

 

[Rick_Grimes]

In order to confirm accuracy, auditors examine supporting documentation such as bank statements, contracts, invoices, and receipts.
They test samples, check balances with customers or banks, examine internal controls, and ensure that reports adhere to accounting standards. In essence, they verify that the financial statements accurately depict the state of the company's finances.

 

[Sophie]

Auditors perform the verification of financial statements by reviewing records, testing transactions, confirming balances with third parties, assessing internal controls, and checking compliance with accounting standards to provide an independent, objective opinion.