Hiring an auditor is important. You may be confident about your accounting department and may think everything is running smoothly, but you can never judge anyone’s intentions even if they may be related to you. You should get your accounts and financial records checked by a third party.
You should be hiring an auditor for your business in order to have your accounts and financial records be crystal clear. Also, it would be helpful to have the basic financial literacy, so that you can understand certain terms your auditor will be using. The auditor’s job is to review all the accounts of the firm is that the legality and validity of your financial statements are secured. They may also give positive advice on risk aversion measures, and may also help you make savings in your business.
These are the procedures an auditor may be including to give a correct assessment of the financial condition of tor business:
1. An auditor may start by gathering all the information he can get about the business from the management. He will check the operations undergoing in the company, he should be made aware of any past frauds or errors in accounting.
2. He will understand and evaluate the internal control system of the company.
3. He will analyse the expected as well as unexpected variances in the account balances.
4. He will test the documents of the balances and classes of transactions.
5. He may observe the physical inventory.
6. He will confirm the status if the accounts with a third party.
After completing the final audit report, he nay also give advice to improve the financial reporting and internal controls of the company to enhance the performance and efficiency of your business.
Auditors can be internal or external. Thee internal auditors work within the organisation as a part of the accounting team. Mostly internal auditors work in the private sector. So you can easily hire an internal auditor for your business. They can also be working in firms outsourced by various client companies.
The external auditors work within the forms of chartered accountants and they do the compulsory audits of the government bodies. They ensure the efficient use of the tax raised money.
Hiring an auditor for your business is the most logical step for having a clear understanding of the accounts and finances of the company.
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