Certified financial statement definition
/What is a Certified Financial Statement?
A certified financial statement is an income statement, balance sheet, and/or statement of cash flows that is issued along with an auditor’s report from a certified public accountant. In the audit report, the auditor attests to the accuracy of the financial statement. A financial statement can only be certified by an external auditor, not by an auditor who is an employee of the entity issuing the statement.
How Certified Financial Statements are Used
Certified financial statements are needed by the investment community and creditors who might otherwise be uncertain about the accuracy of an entity’s financial statements. A publicly held company is required to issue certified financial statements. Conversely, there is no need for certified financial statements when they are only used internally. Many businesses prefer to avoid obtaining certification if there is no specific requirement to do so, since the associated audit fees can be substantial.