It is always important to have a clear picture of the financial health of your organization. In economic downturns and tight credit markets, it is even more important. Ledgers and internal reporting that accurately reflect your financial information enable managers to make better decisions. And financial statements that are audited by respected accounting and financial management professionals give lenders and investors the confidence they need to support you.
Internal audits ensure accurate information
To ensure the accuracy of the information, our risk management team and its specialized internal audit consultants can conduct internal control assessments and reviews. They have experience in nearly every industry across the country and around the world.
Sarbanes–Oxley compliance requires rigorous internal audits for publicly traded companies, but managers of all organizations have begun to see advantages to the information internal audits.
With increasing demand for transparency, preparing for financial statement audits has become a lot more complicated. And the future seems to hold even more regulations, new requirements, and an increased compliance burden.
Growth calls for more complex record keeping
You can depend on our accounting and auditing staff for technical advice, support tools, guidance, financial support services, accounting outsourcing, and financial services and even training when needed. For instance, after the FDA approved several of its products for testing, a medical device manufacturer saw real opportunity for growth, but the company needed capital.
Before it could go out to investors, it needed to bring the company’s books and records up to new standards, so the managers turned to our financial support services team. They retooled the company’s small accounting department and brought in a team of internal auditors who could document the status of the company’s employee benefits and the security and dependability of IT information systems. The financial support services team was able to give the managers the data they needed to successfully tell their story and demonstrate their future promise.
Technical accounting and financial reporting
If you need help with a conversion to International Financial Reporting Standards (IFRS) or if you are in or emerging from Chapter 11 and need fresh start accounting, you can depend on the Plante & Moran accounting and audit professionals. They will invest their talents in your success. Because of the firm philosophy that encourages collaboration, they can also draw on the talents of their 1,600 colleagues to provide you an exceptional level of thinking and problem solving.
And because of record-setting employee retention, you will see the same faces on your projects from one year to the next.
When we begin to work with you, you will understand what we mean when we can say – your business is our business.
Advantages of Audit
Auditing has become a compulsory task in the business organization. All the organizations like business, social, industries and trading organizations make audit of books of accounts. Now-a-days, owner of business and its management are separate. So, to detect and prevent frauds, auditing has become essential. Its advantages are as follows:
1. Audit Helps To Detect And Prevent Errors And Frauds:-
An auditor's main duty is to detect errors and frauds, preventing such errors and frauds and taking care to avoid such frauds. Thus, even though all organizations do not have compulsion to audit, they make audit of all the books of accounts.
2. Audit Helps To Maintain Account Regularly
An auditor raises questions if accounts are not maintained properly. So, audit gives moral pressure on maintaining accounts regularly.
3. Audit Helps To Get Compensation
If there is any loss in the property of business, insurance company provides compensation on the basis of audited statement of valuation made by the auditor. So, it helps to get compensation.
4. Audit Helps To Obtain Loan
Especially financial institutions provide loan on the basis of audited statements. A business organization may obtain loan considering the audited statement of last five years. So, an organization should make audit compulsory to obtain loan.
5. Audit Facilitates The Sale Of Business
Valuation of assets is made by the auditor. On the basis of valuation of assets and liabilities, businessman can sell his business. It helps to determine the price of business.
6. Audit Helps To Assess Tax
Tax authorities assess taxes on the basis of profit calculated by the auditor. In the same way sales tax authority calculates sales tax on the basis of sales shown in the audited statement.
7. Audit Facilitates To Compare
An auditor instructs an accountant in the same way which helps to compare books of accounts of current year with the accounting of the previous year. So, comparing the accounts of current with previous years helps to detect errors and frauds.
8. Audit Helps To Adjust Account Of Deceased Partner
Valuation of all the assets and liabilities of the business is made by the auditor while auditing books of account. Such valuation helps to clear the amount of deceased partner.
9. Audit Helps To Present A Proof
If any case is filed against the auditor regarding negligence, auditor can present audited report as a proof to settle such case. So, it helps to present proof to settle such cases.
10. Audit Provides Information About Profit Or Loss
A businessman wants to know profit or loss of his business after a certain period of time. So, the owner of the business can get information about profit or loss after auditing the books of accounts.
11. Audit Helps To Prepare Future Plan
All the audited statements remain true and correct. Such true and correct account helps to prepare for the future plans.
12. Audit Helps to Increase Goodwill
Auditing shows the profitability and financial position of an organization which creates faith of public over the business. Thus, auditing helps to increase goodwill of an organization.
13. Audit Helps to Amalgamate the Company
Sometimes, same nature of organization may be amalgamated. Auditing makes valuation of assets and liabilities which helps to amalgamate the company. Purchaser of the company can accept such business organization on the basis of valuation made by the auditor.
TYPES OF AUDIT
Audits are generally classified into two types:
· Statutory Audits
· Internal Audits
Statutory audits are conducted for each fiscal year (April 1 to March 31) and not the calendar year. The two most common types of statutory audits in India are:
· Tax Audits
· Company Audits
Tax audits are required under Section 44AB of India’s Income Tax Act 1961. This section mandates that every person whose business turnover exceeds INR1 crore and every person working in a profession with gross receipts exceeding INR25 lakh must have their accounts audited by an independent chartered accountant.
It should be noted that the provision of tax audits are applicable to everyone, be it an individual, a partnership firm, a company or any other entity. The tax audit report is to be obtained by September 30 after the end of the previous fiscal year. Non-compliance with the tax audit provisions may attract a penalty of 0.5 percent of turnover or INR1 lakh, whichever is lower.There are no specific rules regarding the appointment or removal of a tax auditor.
The provisions for a company audit are contained in the Companies Act 2013. Every company, irrespective of its nature of business or turnover, must have its annual accounts audited each financial year. For this purpose, the company and its directors have to first appoint an auditor at the outset. Thereafter, at each annual general meeting (AGM), an auditor is appointed by the shareholders of the company who will hold the position from one AGM to the conclusion of the next AGM.
The new Companies ACT 2013 provides that an auditor shall be appointed for a term of five consecutive AGMs. Individuals and partnership firms, auditors cannot be appointed for more than one or two terms, respectively. After the completion of the term, the auditor must be changed.
Only an independent chartered accountant or a partnership firm of chartered accountants can be appointed as the auditor of a company.
Internal audits are conducted at the bequest of internal management in order to check the health of a company’s finances, and analyze operational efficiency of the organization. Internal audits may be performed by an independent party or by the company’s own internal staff.
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