In general, a private closely held business is not subject to the audit requirements of the Public Company Accounting Oversight Board (PCAOB) or Generally Accepted Governmental Auditing Standards (often referred to as the yellow book).
Currently, the audit of a privately closely held business would be conducted under Statements on Auditing Standards (SASs) issued by the Auditing Standards Board. The Auditing Standards Board is a senior technical board of the American Institute of Certified Public Accountants designated to issue pronouncements on auditing matters applicable to the preparation and issuance of audit reports.
What is an audit?
The purpose of an audit is to provide reasonable assurance that your financial statements are free from material misstatement. An audit will include examining on a test basis evidence supporting the amounts and disclosures in the financial statements. An audit will also assess the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation.
An audit does not provide absolute assurance that there are no misstatements in the financial statements.