10 advantages of financial audit to the companies

 

For a company or business conducting an audit has become an important part of work. All over the world organizations conduct an audit of their business irrespective of their size or the type of industry. Best Accounting and Auditing Firms in Dubai helps entrepreneurs to conduct the best auditing services for their companies.

To detect and prevent any wrong and illegal activity being conducted in the business is one of the main reasons for conducting an audit. This is the reason that conducting an audit is the best option for both businesses as well for the entrepreneurs.

The process of auditing is very beneficial for some people who consider an audit just a waste of time and resources of the company. These types of people are not fully aware of the various advantages of performing an audit and the numerous benefits a business can avail of by conducting an audit.

Key advantages that the process of  auditing can provide to a business :

1.It maintains the consistency :

During the process of audit, if the auditor finds that the reports are not as per the rules and regulations as set by the concerned authorities of the government, then he may suggest some changes which the management of the company must follow. This will provide the assurity that the company is compliant with the prescribed rules and regulations. The Auditing process may take less time for the auditing party by being compliant with the specified provisions.

2. It provides helps in Insurance :

An insurance company will first conduct an audit to determine the extent of damage done while claiming insurance and then they decide the value of the amount to be given by them. Thus an audit can provide help to the company to come to valid insurance compensation.

3. It helps in determining profit or Loss :

To define the profit or loss caused to the company by its activities a financial audit will provide a complete summary of all the workings of the company that would provide the profit to the management of the company. As a result, business people would take decisions to grow and strengthen the company further.

4. It seeks help in obtaining a loan :

To provide loans and other financial help to the company the financial books have been audited and reviewed and this would project the right image of the business and allow banks and other financial institutions to give loans. A company must have an audit report of the company for corresponding years and also maintain the financial records for at least the previous five years.

5. Proper Auditing also helps during winding up :

To value all the assets and liabilities of the company is one of the main roles of the best auditors in Dubai. It would be easier for the management of the company to find the right buyer for the company as a correct valuation would be present, in case the ownrs decides to wind up the company.

6. It helps to assist in determining the total tax :

The profit calculated by the auditors is considered as the final one and based on this calculated profit the tax authorities assess the taxes of the company and this is how the tax authorities are dependent on the auditors.

7. It also help in fraud detection :

To detect and prevent fraud of any kind within the organization is one of the key benefits of performing an audit. An auditor will provide a suggestion as to what course of action should the company take if any such activity is found. This is the reason the process of audit is not mandatory for every company, but it is highly advisable for everyone.

8. It helps in preparing plans :

At regular intervals, an audit is conducted that facilitates the comparison of the reports in each of the quarters. As all the audited statements are considered correct and accurate, it would help the management to plan for the future of the business and make decisions that would allow the company to go ahead than its competition.

9. It provides evidence :

The best audit firms in Dubai extensively examine all transactions and books of accounts, resulting in the creation of a large amount of financial data for the organization.

In a case when an auditor is questioned upon the veracity of his findings of any malpractices as this data is having a basis and can be shown, he can show the proof as to how he reached his decision in the company.

10. It also increases the goodwill in the company :

Conducting an audit implies that the company has nothing to conceal which also boosts the morale of the stakeholders of the company. The company is clean and has nothing to hide which will ultimately boost the goodwill of the company and it also sends a message to the potential investors.

All the points mentioned above make it clear that there are various advantages that a company can avail by conducting a financial audit of the company. It would be very challenging to determine the exact financial picture of the company without an audit of the company. The audit process would grow more complex as the size of the company would increase. Thus, it is very important that the auditing of a company should only be done by a reputed and professional auditor.

Tgs Koya is one of the reputed auditing firms in the UAE, that would handle all the accounting and auditing functions of the business. They also provide a range of other services such as Taxation services, Interchange Valuation, and best vat consultancy services in Dubai.