Financial auditing refers to an accounting process used in businesses across the globe. Independent auditors will examine a business’ financial transactions and verify it’s statements. The goal of this process is to present an accurate account of a company’s financial business transactions. The practice is used to make sure that the company is trading financially fairly, and also that the accounts it is presenting to the public or shareholders are accurate and justified.
The results of a financial auditing process can be presented to shareholders, banks and anyone else with an interest in the company. It is a great way to ensure that the business is trading honestly and within the guidelines and requirements of the law and other industry standards.
A financial audit can usually take place once every year, and this is done by independent auditors. All the financial aspects of the company are inspected, and a follow-up audit may also be undertaken after the year end in order to compare results. These audits have many benefits, and one of them is to ensure that the company is in good standing with all its creditors, should the owners wish to sell in the future. A company that passes a financial audit will be more credible and valuable to future buyers and investors.
Small businesses might not need to worry about financial auditing every year, but larger organisations should definitely consider this as they can verify that all their records are in order and that their profits and losses were correctly calculated. Financial statements can also be verified, which is very important for any growing business. Another benefit is that an auditing company can identify and possible areas where the business might be at risk, so that these issues can be addressed and corrected in time.
Colin Smith & Co specialises in a variety of services including financial auditing. They offer a variety of valuable auditing services and strive to deliver efficient and cost-effective services that will add value to your business.