When Should You Get an Audit For Your Business?
An audit is an important step for any business, regardless of size. A financial statement audit verifies correctness and adherence to rules and regulations by examining the financial statements independently.
In addition to assuring stakeholders, an audit provides insight into a company’s financial health and performance.
Corporations frequently use a public accounting firm for auditing their financial accounts. Audits are occasionally a work the organisation must carry out, although they can be expensive and time-consuming.
However, how can you know if you fit in with this group?
If you’re unsure whether an audit is the best option, ask these important questions to guide your decision-making and learn where to find accountants on the Sunshine Coast QLD.
What Is An Unbiased Audit?
A company may use an impartial CPA or CA, a third party, or an independent public accounting firm to analyse its financial records and transactions to minimise conflicts of interest and protect the audit’s integrity.
Audits are regularly performed to protect shareholders and potential investors from erroneous or deceptive financial statements.
The auditor is typically in charge of financial accounting and related data analysis, reviewing corporate policies and practices, determining the worth of the company’s assets and looking for signs of impairment, calculating tax obligations, and verifying that rules and the tax code are followed.
What Reasons Are There For An Audit?
Numerous circumstances might prompt a corporation to begin an audit. Consider the components of the following business models that demand independent audits:
- Venture-backed: Many venture capitalists do this, though not all of them. They have the right to demand that an experienced third party conduct an in-depth audit of your financial accounts.
- Bank-affiliated: Not all banks will want an audit of the financial records of your business. However, a lot of people of a certain size do require them.
- Seller: Every corporation that intends to sell its firm would be wise to organise an audit. Most prospective purchasers will require one because they want to confirm that the numbers you present adhere to GAAP. The sale price can increase with two to three years’ worth of audited financial documents.
- Public: You need three years’ worth of audited financial documents to float your business.
When Ought One To Think About An Audit?
If you plan to have your financial accounts audited, you should work with a financial expert and set up a meeting with your audit team early.
You must inform your financial staff of the difficulties facing your business and give them ample time to complete their list of audit request items.
What Actions Should You Take To Prepare For An Audit?
The more prepared you are, the faster and easier an audit can be conducted. Preparation begins well before the audit and has much to do with how your business initially handles its finances.
Make sure your business is audit-ready by carrying out the following important tasks:
Implement a rigorous closing process each month. Making sure that all transactions, journal entries, and financial statements are timely and precisely recorded will be made simpler.
Collaborate with a seasoned financial specialist to assist you with your business ambitions. The smartest way to organise, plan, and handle financial issues is to find the right financial consultant.
Look for someone with auditing experience. Usually, this will be the company’s chief financial officer or an accountant on the Sunshine Coast. The CFO will be in charge of working with the audit team, offering any pertinent information, and resolving any potential issues.
Amass the required information, documents, and data.
What Documents Are Needed For An Audit?
For a typical audit, access to the following will be required:
- broad transactions
- confirmation of significant assets (i.e., cash, accounts receivable, etc.)
- Corporate records about equity
- Material contracts
- Internal system safeguards are examined
- P&L classification for expenses
Conclusion
Companies need to understand when to get an audit. The timing of an audit depends on the size and nature of the organisation, the type of audit, and the organisation’s goals.
Generally, companies should consider getting an audit by accounting firms on the Sunshine Coast if they are experiencing significant changes in their business structure, operations, or finances or if they need to meet certain legal or regulatory requirements.
Additionally, companies should consider getting an audit if they want greater assurance and visibility into their financial statements and performance. Ultimately, the right time to get an audit depends on the needs and goals of the organisation.
SMB Accounting does Individual tax returns, small business accounting with various small business accounting packages available, SMSF audits (self-managed super funds), and a Xero accounting software-based accounting business. We also offer the following audits: trust account audits, audits of non-profit organisations, audits of special purposes financial statements, special needs audits, and more. Speak to an accountant on the Sunshine Coast today!