In this diploma thesis, an audit of the financial statements of a selected trading company founded in 1995 as a Limited Liability Private Company (Ltd.) with its head office in Zagreb, was conducted. According to the Accounting Act, the company is classified as a medium-sized company. The business activities the selected company consist of retail, wholesale and Internet sales of household appliances, televisions, PCs, IT equipment and appliances and similar goods, with stores throughout the Republic of Croatia. The aim of this thesis was to analyze the basic financial statements of the selected company and conduct an audit based on the analysis to define the audit opinion. The basic financial statements that were used in the thesis are the balance sheet and the income statement. The analysis led to the following conclusions: the company achieved revenue growth compared to the previous year, but with the opening of new sales centres still recorded a decline in profits in the current year. The audit found that the selected company follows and complies with the law, makes a fair profit, and expands its business without rapid revenue growth that could be questionable to auditors. A positive audit opinion may be issued based on the financial statements and the analysis performed.