Board discussion
Even though the MD&A section of a company’s report is unaudited, it clearly provides a good standing place for financial statement understanding. ‘Management Discussion and Analysis’ provides an overview of the previous year of operations and how the company fared in that period of time; it also touches on the upcoming year, outlining future goals and approaches to new projects. The report highlights any favorable or unfavorable trends and identifies significant events and uncertainties that affect the company’s liquidity, capital resources, and results of operations.
Internal audits
Auditing is the independent examination of any entity, whether profit oriented or not and irrespective of its size or legal form, that leads to a categorical expression of opinion. Audits should present a fair image of an entity’s position and performance, provide a review of the reporting methods adopted, and assess any means of internal control. The auditor should remain independent while carrying out of the task; it is however essential that a deep understanding of the business and its idiosyncrasies is achieved.