| Housing and Urban Development (HUD) accepted | | | | Within the audited financial statement, the certified |
| audited financial statements are used by Mortgage | | | | public accountant provides an opinion, either |
| Broker, Lenders, and multifamily property business | | | | qualified or unqualified, about the nature of the |
| owners to provide financial accountability and | | | | financial documents. An unqualified opinion in an |
| accuracy to HUD and to ensure compliance with | | | | audited financial statement indicates that the CPA |
| Federal Housing Administration (FHA) mortgage, | | | | is in agreement with the methods used by the |
| business structure and operation requirements. | | | | organization to prepare their financial documents. |
| Audited financial statements need to be provided | | | | The audit is found to be accurate, complete and |
| to HUD in order to be able to receive mortgages | | | | fairly presented to meet the requirements of the |
| and subsidies from HUD. Providing HUD with a | | | | US Generally Accepted Accounting Principles |
| company’s audited financial statements | | | | (GAAP), Financial Accounting Standards Board |
| enables HUD to determine how the company | | | | (FASB), and Internal Revenue Service (IRS). The |
| operates financially and proves that the financial | | | | audit provides the CPA a reasonable basis for |
| statements and accounting practices have been | | | | their opinion that the financial statements are free |
| subjected to review, testing, and analysis. Based | | | | of material misstatements or false/missing |
| on the opinion presented in the audited financial | | | | information. |
| statement, HUD can determine if a | | | | A qualified opinion indicates that the CPA is not in |
| company’s financial statements are free of | | | | agreement with aspects of the financial |
| material misstatements or false/missing | | | | statements and/or methods used to prepare |
| information or not. | | | | their financial documents. A qualified opinion |
| An independent Certified Public Accountant (CPA) | | | | indicates that the CPA is not confident that the |
| will prepare an audited financial statement using | | | | financial statements are correct or accurate. |
| financial documents provided by the company. | | | | Occasionally an opinion will not be given within an |
| These documents will include various financial | | | | audited financial statement. This could be due to |
| documents such as cash flow, income statement | | | | the fact that there were insignificant documents |
| and balance sheets. The CPA examines the | | | | available to properly prepare the audit, or there |
| documents which support figures within the | | | | were issues that need to be addressed before |
| financial statements, assesses the overall | | | | evaluating the accuracy of the financial |
| accounting principles used, and evaluates the | | | | documents. A lack of opinion usually indicates that |
| overall financial statement presentation. From this | | | | an organization needs to improve their accounting |
| information the CPA creates an audited financial | | | | practices so they can meet the requirements of |
| statement. | | | | the US GAAP, FASB, and IRS. |