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Q: What are the requirements for a financial statement to be audited? Are small businesses also required to submit a financial statement? And are all CPAs authorized to sign a financial statement? 

 A: If your business generates an average of at least P150,000 every quarter and you have paid up capital of more than P50,000, then you will be required to submit financial statements that must be audited by a Certified Public Accountant (CPA).

You will need to prepare a trial balance supported by account schedules such as accounts receivables, accounts payables, property, plant and equipment, bank reconciliation and others which the CPA may need in the audit process.

The CPA may also ask you to provide supporting documents such as sales invoices, official receipts, billings, issued checks and statements of accounts from banks. It will be good if you can organize all your documents so that when tax season comes next year, you will be prepared for audit.

Henry Ong, CMC, CMA, is president and COO of Business Sense, a business advisory firm that provides expert solutions to small and medium sized companies. You may reach him at hong@businesssense.com.ph.