An effective audit will help you achieve your business goals
Having an effective audit system is of paramount importance for your company because it will allow you to attain various corporate objectives. Any business that has a number of staff, functions, office locations and technical systems may possibly be running the risk of errors and irregularities. Therefore, it is desirable to check and deter fraud by carrying out a regular audit. What is more, an audit will present a reliable health picture of your organisation on the market. In order to strengthen the financial of your organisation, you should collaborate with an external auditor. If you want to make sure that you are in safe hands, hire Parsons Accountants. The independent auditor will contribute to the company’s audit system in important ways.
The word “audit” is derived from the Latin “audire”, which means to hear. Auditing refers to a formal examination of accounting books, documents and even vouchers of the business with the purpose of verifying the profits and the loss, basically the financial position of the business. In short, an audit is a systematic assessment of the financial records of the business, the department o organisation in order to establish accuracy and efficiency.
Why does your business definitely need an audit?
The need for an audit arises from the fact that you are required to ensure the correctness of all accounts related to the business. You will have to provide shareholders confidence regarding the information stated in the financial records. Determining the accuracy of the records is thus of paramount importance. Your will enjoy more credibility and should you want to sell the business within the next 3 years or so, an audit will come in very handy.
Accomplishing business objectives
All business processes need some form of internal control in order to facilitate supervision and monitoring. What an auditor will do is review the design of the internal controls and thoroughly verifies the accounting records. This is there reason why auditors, whether internal or external, are capable of making valuable suggestions for improvement, but also to formulate future policies for the business. The auditor will also assess the risk of material misstatement. Therefore, you will be able to determine how to allocate resources and clearly know which product lines are profitable.
Another role that the audit plays is in fraud prevention. To be more precise, recurring analysis of the operations of your company’s operations and rigorous controls of the internal system will help you detect and of course prevent various kinds of fraud. An active and diligent audit system will disable an employee or vendor to defraud the company. Although it may not seem possible, the truth is that a small business can lose millions of dollars every year as the result of theft. Employee committed frauds include skimming payments for customers, cash theft and improper payroll transactions.
Last but not least, an audit is good for ensuring that you do not get involved in the accounting functions on a daily basis. What you can do instead is make use of your expertise in order to take care of issues that are more urgent for the business.