Do You Need Auditing Services?
Does your company or business need to be audited?
Getting auditing services depends on a variety of factors. Since many audits take place today, there are many misconceptions about them as well. There are audits conducted by the ATO and other government agencies. There are workers’ computer audits, environmental audits, energy usage audits and peer reviews where CPA firms audit other CPAs. It may seem like not work is getting done because so much time is spent on checking each other. However, sometimes, it is best to check on the company’s control processes and financial statements to get a clear view of the status of the business, which is important for you as a business owner and to your clients, investors and shareholders as well.
What is a certified audit?
The primary objective or goal of an audit is to express an opinion on the two aspects of the financial statements of an organisation. This may either be that the financial statements are fairly stated and are in accordance with GAAP. The purpose of GAAP is to promote consistency and fairness in financial reporting all throughout the business community. GAAP provides comparability of financial data.
Audit of financial statements are for the benefit of outside users like government agencies, banks, and membership organisations. In an audit, companies are required to make an assessment of the risk of fraud and perform steps to detect the presence of fraud. Audit, however, is not designed to know on how much has been taken. Audit services also include the evaluation of accounting control systems.
How do you know if you need auditing services?
If you have a bank loan that requires an audit, then you have to have it done. This is to comply with the terms of the loan. If you receive government or private grants or are anticipating to apply for some, then you might need to have an audit conducted. Few granting agencies or foundations will release funds without a certified audit.
What can auditing services do for me?
The benefits of auditing services.
- Audits gives a measure of comfort that the staff, finance committee, are willing to let outsiders inspect the books and records adding a layer of accountability to the control systems of the company.
- Audits make an annual clean-up of books and records. Auditors help bring the fixed assets schedule up-to-date.
- Auditing services can help the firm stay up-to-date on tax, legal and accounting issues. Being surrounded by professionals who stay current on issues that affect your situation is important in managing the business well.
- If fraud is detected in an audit, the right people or personnel are notified. CPAs do extensive tests to determine the potential or occurrence of fraud. These will be reported to responsible authorities.
- Findings of an audit are compiled in a letter where the weaknesses and suggestions for improvements are detailed. This management letter is beneficial like the financial statements because it includes the evaluation of the accounting system through interviews, testing of transactions and questionnaires answered by parties involved in the business.
Obstacles to an audit.
One of the most common obstacles of conducting an audit involve money. Audits tend to be expensive and difficult to squeeze into a small budget. In such cases, you may ask your CPA about the possibility of conducting a review that is smaller in scope than an audit. Reviews offer the benefit of outside eyes to look into the books and are less expensive.
There are sometimes overriding audit concerns like the misuse of funds and question regarding the accounting control systems. For such cases, ask the CPA for a consulting engagement. Auditing services can save the business money and help directly address the problem.
Deciding on whether to conduct an audit or not is like purchasing a car. A lot of factors go into the selection of a car like the miles that you need to drive, the amount of money you have for gas and other things. The same is true when deciding to get auditing services. There is a need to take time to assess the company’s or business’s needs and requirements before deciding if you need to get auditing services. Once you have evaluated your options, choices and needs make the best choice that is most suitable for you.
Kingston Knight Audit are the Auditor Melbourne experts to contact when dealing with your trust account audit, SMSF Audit, financial statement audit, and internal audit requirements. Contact us today, Kingston & Knight Audit offers a free telephone consultation to establish how we can best help you achieve the assurance and compliance you require.