What does it mean when financial statements are unaudited?

Company financial statements are written records that convey the business activities and the financial performance of a company. Financial statements are often audited by government agencies, accountants, firms, etc. to ensure accuracy and for tax, financing, or investing purposes. Company financial statements include:

Índice Show

Audited Financials
Unaudited Financials
Key differences between Audited Financials and Unaudited Financials Statements:
Difference Between Audited & Unaudited Financial Statements?
When Are Unaudited Financial Statements Used?

Balance sheet
Income statement
Cash flow statement.

Investors and financial analysts rely on financial data to analyze the performance of a company and make predictions about its future direction of the company’s stock price. One of the most important resources of reliable and audited financial data is the annual report, which contains the firm’s financial statements. The financial statements are used by investors, market analysts, and creditors to evaluate a company’s financial health and earnings potential.

Financial auditing refers to an accounting process applied in business. The process involves using an individual body for evaluating the financial transactions and statements of a business. The ultimate purpose of financial audit is presenting an accurate amount of the business transactions of a company.

Audited Financials

Audited Financial Statements are the company financial statements provided by a business, person or an entity after being thoroughly checked and governed by an external individual or institution for providing accurate and reliable information to their shareholders and investors.

Unaudited Financials

Financials released by the organization that are not scrutinized or verified by an external independent auditor. Unaudited financial statements show the same financial data as audited ones. But it is quicker and cheaper to draw them up than to go through the audit process and some of the numbers might differentiate as these are recorded as per the company’s management discretion.

Key differences between Audited Financials and Unaudited Financials Statements:

Only Annual company financial statements are audited whereas quarterly and half yearly statements are unaudited.
Audited Financial Statements are reported by the company in its annual report for each year whereas unaudited financial statements are reported by the company during the whole year as per the respective period.
Audited company financial statements are more well scrutinized and verified than the unaudited ones which acts as a confirming and reliability factor for the investors and shareholders.
Unaudited results for respective periods are mainly shared by the company just for the sake of providing a brief overview of the current period’s outlook and how the company is operating in the current period for letting the stakeholders know about the whereabouts of the company.
Audited financials are more costly and are recorded as per the company laws whereas unaudited ones are cheap and recorded as per the management’s discretion.

In StockEdge App, we show both the audited and unaudited financial statements for each stock as and when released by the company. We have two different tabs for the respective showcase of data : Fundamentals And Financials

Fundamental Tab :

In StockEdge App, there is a fundamental tab for each stock which is furthermore divided into three sections : Overview, Results and Ratios. In the Results section, the unaudited Profit and Loss Statement of the company is shown for the quarterly, half yearly and annual periods. Both Consolidated and Standalone data can be seen via selecting the desired one with respective period in the drop down box.

In the following image you can see the Fundamental tab of Infosys Ltd displaying the unaudited results for the last 9 years.

Financials Tab :

In StockEdge App, there is a Financials Tab for each stock, consisting of 4 sub tabs: Chart, B/S, P/L and C/F. These sub tab display the Financials of a stock in a graphical, and tabular form respectively for each specific company financial statement. This tab shows the audited data in Balance Sheet, Profit and Loss and Cashflow Statement which is directly extracted from the company’s annual report as and when published by the same. All line items and heads are shown in the best interest of the users via grouping of heads and showing 9 years of data for better understanding and evaluation of the company financial statements.

In the following image you can see the Financials tab of Infosys Ltd displaying the audited financials for the last 9 years.

Read more about Financial Statements on Elearnmarkets blog.

Bottomline

Data in the Fundamental and Financial tab can differ as explained above, one being audited and the other being unaudited. To access the results immediately after it is published you can refer to

Fundamental tab of stocks and to access Audited results refer to the Financial tab.

Join StockEdge Club to get more such Stock Insights. Click to know more!

You can check out the desktop version of StockEdge.

Tags: auditedfinancial statementsInvestingunaudited

A company’s financial statements are quantified reports of its performance for a specific period, usually a year, but can sometimes be quarterly as well. Financial statements typically include an income statement, balance sheet, as well as cash flow. These things record the stream of cash in and out of the company’s coffers for analysis purposes later on. Ultimately, the numbers in these statements serve to tell investors, authorities, and the company itself whether they are growing or losing in the business.

Difference Between Audited & Unaudited Financial Statements?

Financial statements can either be audited or unaudited. Auditing is a process conducted by a third-party auditor who examines submitted financial data for accuracy. Audited financial statements are required for companies available for public ownership, acting as a way for investors and the general public to assess a business entity as worthy of investment or not. Naturally, companies with substantial income and steady cash-flow for their industry are favourable to potential investors.

Companies who comply with audit requirements of the state also enjoy good standing before its home or host country’s regulatory body. In Singapore’s case, the body in charge of this is the Accounting and Corporate Regulatory Authority or ACRA.

When Are Unaudited Financial Statements Used?

Generally, Unaudited Financial Statements are used internally by companies so as to save on auditors’ professional fees. These financial statements are also regarded as being less accurate than audited ones. One must note, however, that unaudited reports do contain the same set of data, which includes income, cash flow, and balance sheet. Such report is also prepared by a duly appointed company accountant. The process usually stops there though, without the need for an auditor to counter-check.

If audited financial reports are used for maximum transparency, unaudited reports are used for maximum cost-efficiency within a business entity. Companies are highly recommended to hire the services of well-established auditing companies to ensure high standards of accuracy every time.

Google+