Financial statements have been formed upon in all supposed accounting beliefs (GAAP) as well as audited by CPA firm, so do investors need to be concerned about the effect of those statements? Please insist your answer.
Please note: This is NOT the personal financial subject of my own…this is the subject from my financial category 
so, in box we have been wondering, no I am not seeking or perplexing to deposit during this point. I am only arrange of stumped as well as am mislaid for words, so I am asking for someone’s assistance upon this subject 
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The investor shouldn’t simply accept the audited financial statements as fact just because they are signed by a CPA Firm. Companies like Enron had their financial statements audited by one of the five biggest accounting firms on the planet and their financial statements turned out to be a complete sham.
There will be situations where an unreputable CPA Firm will audit a company’s financial statements.
There will be situations where a company tricks a reputable CPA Firm by providing them with false information to audit.
There will be situations where a CPA Firm interprets a company’s financial situation in a manner that is not correct or in a manner where it will not provide sufficient information to the investor.
Always keep in mind that the company being audited is paying the CPA Firm to perform the audit, so while the CPA Firm is technically considered an “independent auditor,” are they really independent?
The bottom line is that investors should use audited financial statements as one means of evaluating whether or not they should invest in a company.
Michael T. Hanley, CPA is the Managing Partner of the Smithtown, NY CPA Firm, Merl & Hanley, LLP and the author of Effective Tax Planning for the MicroBusiness.