If you own a business, large or small, chances are that you have considered obtaining external auditing services from a registered audit firm. There are many good and valid reasons why you might want this, and there are a lot of benefits to external audits too.
External auditing is a review of your company’s financial statements, done by someone who is not directly affiliated or involved in your business. These audits has a very important role, in that they are performed by an outside, independent auditor, who can verify a company’s financials and statements. External auditing can be done once a year, or as regularly as you or your shareholders require. In most cases they are required by law, at least once a year for most entities. For governments, an external audit will include a review of the budget, the allocation of funds and the actual expenses to ensure the budgeted revenues and expenses were correctly compiled and used.
Performing external auditing on your business has many benefits, including the ability to confirm your financial position to shareholders and management. Having passed an external audit will also reflect positive on your reputation and this might come in handy should you choose to sell your business at some point, or want to attract new investors. Audits are always beneficial to do for any size business, although they might not be legally required for your business.
External auditing will feature a report outlining the auditor’s findings regarding your business; this will generally be a summary of the overall validity of your financial statements and other documents you presented. Should the audit report uncover any issues or discrepancies in your financial statements, they will be noted and include suggestions on how you can correct them. The audit will often include financial suggestions for your business as ways to improve its overall financial standing and accounting practices.
Colin Smith & Co is a professional accountant team that provides external auditing services to customers throughout South Africa. Their team of professionals can also assist you with accurate tax planning, administrative services, and payroll assistance for business customers.