The general term for the process of evaluating a person, organization, system, process, company, project, or product is an audit.
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A properly run business has a number of obligations under state laws to protect officers, directors, and shareholders from being the subjects of a legal claim. The corporate formalities necessary to satisfy these obligations include, but are not limited to: holding shareholder meetings, board of director meetings, and maintaining records of finances and important decisions.
The effort a reasonable person (the legal term is a “prudent man”) in the management of his or her own money would take to investigate a company before making an investment in securities.
An audit is an examination and evaluation of the financial statements of an organization. An audit is required for offers of more than $500,000 under the CROWDFUND Act. An auditor will ascertain the validity and reliability of information contained in the financial statements. An auditor typically issues an opinion as to whether the financial statements are presented fairly in all material respects. An audit is not a total guarantee of accuracy as it seeks to provide only reasonable assurance that the financial statements are free from error.
During a financial statement review, an accountant will review the financial statements prepared by a company to establish whether there are material modifications necessary to bring the statements into conformity with an applicable financial reporting framework. This process is less intensive than an audit and is required for offerings between $100,000 and $500,000 under the CROWDFUND Act.
A systematic review of intellectual property assets owned, used, or acquired by a company used to examine use of intellectual property and indentify risks in the company's intellectual property portfolio.