Importance Of Auditing And Accounting In A Business

It is not easy to run a company with so many factors to consider. The business aspect of a company deals with purchases, manufacturing, procuring orders and fulfilling customer requirements and needs. Inventory records, publicity and marketing, expenses, income along with net profits, capital requirement, employees’ welfare including provident funds and other facilities are also to be considered. There are a number of things to consider for the smooth running of a company.

The question arises whether the business or company is doing well or not, whether the business objectives are being met and whether the company is making an overall profit or not. For all these queries, auditing is carried out. An annual Aduit is a way to evaluate the effectiveness of the internal controls of a company, which is vital to be maintained to achieve the business objectives of the company as well as to obtain reliable financial reports on its numerous operations.

Auditing also helps prevent misappropriation of assets and fraud and also helps minimise the cost of capital. It helps provide company directors and shareholders with a view that everything is going on well internally within the company. Similarly, finance directors and accountants working for the company can benefit from a professional cpa, who works as auditor with advice and knowledge. The professional assures of maintaining records and finances properly knowing that the internal systems in the company are efficient and free of fraud. Visit this page for further information regarding overseas company registration.

Additionally, while filing for tax return it is mandatory for an audited copy of the financial statements of the current economic year to be submitted along with corresponding amounts for the previous year. The documents to be submitted annually for all companies, which comprise of the audited financial statements, include profit and loss account, balance sheet and the cash flow statement. The annual filing is a statutory requirement for all the businesses that have been registered in order to maintain as well as renew their legal status to keep doing business and operating for a certain period. This holds true for companies that actively carry out transaction and business as well as companies that are registered but dormant. All company owners are obliged to comply with the rules of annual returns or annual filings.

Thus, for companies to continue to operate and do business auditing is mandatory as the financial statements submitted need to be audited by a professional. The maintenance of accounts is equally important to be recorded and maintained. Therefore, accounting and auditing are very important for evaluating a company and its objectives. These important tasks can be handled by professionals possessing expertise.