No matter how big or small your business is, financial statements are integral to the success of your venture. In fact, accounting is seen as the language of business. You’ll often need to provide the information in financial statements to your investors, lenders, and state and federal tax entities. An audit can provide you with a formal examination of your business’s financial situation. Below you will find the main reasons to audit your financial statements so you are always aware of the financial status of your business.
Reasons to Audit your Financial Statements
A financial audit provides you the assurance that your business financial statements are accurate and in conformity with generally accepted accounting principles. Consider the following benefits of auditing your financial statements. Then, when you are ready, Indevia is here to help with online bookkeeping services to keep your finances in order.
Summarized Information:
Assessing the financial standing of your company is the most common reason to complete a financial audit. It can provide you with information on critical areas of concern and improves the credibility of your business. A financial audit can help give you an opportunity to improve before certain issues become too big to resolve. Avoiding your financial numbers will not resolve the issue so it’s important to be informed and have the necessary information to ensure your business succeeds.
Assess Viability:
A financial audit can help provide you with the necessary information to determine if your business is viable. Examining your financial information can help you understand your business revenue and profits. This information can help you figure out where you need to examine further in terms of your financial future.
Risk Assessment:
Investigating and understanding business risks is key. This includes fraudulent activities, which can sometimes be unintentional or even concealed without your knowledge. Financial auditing is an effective way to catch financial discrepancies and the root of the issue. This can be monumental when it comes to the success of your business as minimizing your financial risk is key.
Big Picture Improvements:
Financial audits can provide you with a unique perspective as it provides both the detailed and big picture information when it comes to your business finances. An audit can help you determine how to move forward to reach your business goals in the long-term.
Opportunity for Funding:
Depending on the size of your business, you may be interested in getting more funding. When investors are considering your business, providing them with credible and authentic numbers can increase your business’s credibility. A financial audit with accurate numbers can help show potential investors the value of your business in a number of ways.
Are Audits Really Necessary?
Some people may put off financial audits for their business, but this can be a huge mistake. Not only are financial audits beneficial for your business, but they are also necessary in some cases. Businesses are often required to provide information to government entities, banks, or investors. Planning your next business audit can help you stay organized and prepared.
It’s important to schedule regular audits for your business. Depending on the size and needs of your business, this may be monthly quarterly, twice a year, or annually. It’s important to choose a certified, independent auditor with a credible reputation in the field. Providing your independent auditor with all of the necessary financial information is crucial when it comes to the results of your audit.
If you are concerned that your financial documents and business finances are unorganized, contact the team at Indevia Accounting. They can help provide you with a variety of accounting services to ensure your business financials are in order. Having trusted professionals on your side can make getting through a financial audit so much easier.
