Question:

What is an audit firm?

Audit Firms

Audit firms are independent entities within the accounting profession. They provide their clients with independent opinions regarding the fairness and reliability of the firm's records supporting the financial statements. This fairness and reliability is based on the firm's adherence to GAAP (Generally Accepted Accounting Principles). The audit firms also provide a variety of other services ranging from progress mapping, Sarbanes-Oxley Act (SOX) compliance, financial audits, accounting software and/or tax consulting, to bookkeeping services - amongst other independent services.

Audit firms can be either small, localized firms, regional firms, or large international firms. The smaller audit firms traditionally are noted for smaller clients needing bookkeeping and tax services. Regional firms are considered midsize with revenues around $1-3 million. They mainly extend nationwide. The larger international firms provide audits of Fortune 500 clients.

Audit firms are usually CPA firms and/or public accounting firms. (If the company is not publicly traded, a CPA is not needed.) Other audit services include providing operational audits, and/or monitor IT system efficiency and effectiveness.

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