The goal of the audit is to determine if the financial statements are representing a true and fair view of your company. During the audit process, the auditor can uncover certain things about your company that you might not have known, which is then reported to the owners of the company.
Here are a few ways that your business can benefit from an audit:
- Identify risks in your company that management might not be aware of and determine if adequate controls are in place to mitigate these risks to an acceptable level.
- Identify weaknesses within your accounting system, allowing improvements to be made to eliminate these problems in the future.
- Identify poor accounting practices, such as employees who are getting lazy about performing the correct financial tracking steps and reconciliations. It is often hard to see these issues unless you can view the overall picture, which is possible with an audit.
- Strengthen the credibility of the company’s financial records, which is important if you are planning to either sell or get finance in the future. When you have documented information showing the success of your company over multiple years, then it will be easier to prove the financial security of the business.
- Improve tax planning and tax compliance, to ensure that you are ready for tax season and that you are leveraging tax write-offs and benefits as much as possible. By planning, taxes are less stressful and easier to file.
- Uncover fraud, which could potentially include situations where employees or management are stealing money or assets from the company. An auditor can identify discrepancies so that you can eliminate the problem.
One of the biggest benefits of conducting an audit for your business is that you can get a clear understanding of the financial situation of your company. By identifying cash flow, margins, and other financial information, you will have all the information you need to make smarter and more informed financial decisions.