What Are the Major Benefits Of Audit For An Organization |
Posted: July 8, 2016 |
Today, auditing has become a mandatory task in every organization such as business, industries and trading organizations. All these organizations make an audit of the books of accounts. We know that business owners and their managements are separate, thus auditing has become essential to detect and prevent frauds. There are plenty of benefits of auditing. It can improve efficiency and profitability of a company by helping the management better understand their working and financial systems. Some of the key advantages of auditing are mentioned below. Helps To Detect And Prevent Errors & Frauds The prime responsibility of an auditor or audit service company is to detect errors and frauds, and preventing them. Therefore, despite the fact that companies don't have need to audit, but they make audit of all the account books. Helps To Obtain Loan Banks and financial institution provide loan on the basis of the audit report. You may get loan considering the audited statement of last 3 or 5 years. Therefore, you should make audit to get a loan. Helps To Increase Goodwill Auditing also shows the profitability as well as the financial position of a company, which creates faith or trust of the public over the business. Therefore, it helps to boost goodwill your company. Helps To Assess Tax If you are running a business, then you must know that tax authorities assess taxes on the basis of profit calculated by an audit firm or auditor. Likewise, sales tax authority calculates sales tax on the basis of sales shown in the audit report. Helps To Maintain Account Regularly If accounts are not maintained appropriately, then an audit service firm brings up a lot of issues. Thus, an audit provides moral pressure on keeping up records frequently. Helps To Get Compensation In case of get any loss in the property of your business, then insurance company gives compensation on the basis of audit report prepared by a certified audit service firm. Helps To Present A Proof The auditor can present audit report as a proof if any case is filed against him about negligence, in order to settle the case. Provides Information About Profit Or Loss As a businessman, you want to know profit or loss of your business after some time. Thus, you can get information about profit or loss after auditing the books of accounts with the help of audit services in Pune. Audits can identify areas in the financial structure of a company that require improvement, and how to implement the appropriate changes and adjustments. Apart from this, an audit can uncover discrepancies and inaccuracies within an company's record, which might be signs of weakfinancial organization or even internal fraud.
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