When you’re running a business it’s vital to stay on top of all of your paperwork and financial documents. Your finances are one of the most important parts of your business, and knowing where they are, and how balanced your business is right now could be the difference between a good year and cut-backs.
A financial statement audit is an audit in which a company’s financial records are checked and examined. This audit is usually carried out by a reputable and professional auditor, who is happy to sign a non-disclosure agreement if your business requires it. Once your financial statements have been checked, your auditor will be able to report back to you on the accuracy of your financial statements and suggest any changes that you might consider making to make keeping track of your finances easier.
Auditing your company’s financial statements ensures that whoever is responsible for the statements is kept accountable for them. This is particularly important if you have multiple people looking after the finances of the company, or if you have several shareholders who have a say in the company’s finances. Managers and shareholders need to be kept up-to-date with company finances at all times, especially if they are required to be updated by their contracts.
When a company is willing to have a financial audit, it shows that they are reliable and willing to prove correct information to any financial bodies that require documents or proof from them. This includes the tax office, financial providers or institutions, or, as mentioned, managers and shareholders of the company. A financial audit is particularly useful for tax purposes, because tax officials can rely upon the accuracy of the information that is provided to make their own decisions based on the audited documents.
Similarly, the audit can help boost your company’s credit rating and its value. A regular financial audit is a positive action to take in any business, because it provides a financial history for the business that is 100% accurate. This is attractive to lenders and investors, which is perfect for business expansion. If you were looking to sell your business or pass it on to someone else, an audit would be beneficial, as it would show them the exact financial state of the company.
A financial audit will provide a complete report of the current state of your company. Because you’ll have the complete record handed to you by an auditor, you know that no one in your company can hide anything from you, which can give you peace of mind in any situation. Regular auditing should be considered a part of the necessary “housekeeping” of any business. Your profits are the reason that your company is able to grow, and if you can’t keep track of the incomings and outgoings of your company, how can you efficiently look after your clients during your business trading? A financial audit is about showing your own company a little extra care, and keeping your business plan running smoothly.
