Benefits of An Accounting Audit
The accounting audit report provides the detailed financial perspective of an organization. The report is prepared at the end of every financial year. Moreover, the document is useful to the people who want to have a look at the accurate picture of functioning of an organization. Besides this, the document aims to offer an insight into the viability and profitability as well as functioning of a company in the form of a commercial enterprise. Apart from these, the report provides comprehensive information that is verified to be accurate and authentic.
The reporting period is known as financial year. This refers to the beginning of an accounting year, implying the day which follows the end of previous financial year. If the company has been newly established, then it refers to the day of incorporation of the company.
The process of filing an accounting audit report is applicable to all the public companies irrespective of that they may be filing for exemption on the basis of content of report. Moreover, every company, whether private or public needs to maintain the accounts of its performance and existence. The accounts that are prepared must incorporate Balance Sheet, Profit and Loss account, Directors' report duly signed by a secretary or a director of the company and auditors’ report. Apart from these, group accounts need to be prepared in case of a group of companies.
The auditor could be a firm or any individual who has been appointed for scrutiny and preparation of financial picture of an organization through its performance during the entire financial year. Both private and public companies conduct the audits. Moreover, the auditor is also responsible for preparing an accounting audit report. This report encompasses all the financial and operating aspects of an organization. Besides this, the auditor also reviews the report and discusses it with management of the enterprise and external auditors. Apart from these, the auditor also reviews and monitors the integrity of an organization’s internal control system.
The parties interested in evaluation of a company’s performance would require the accounting audit report to form an opinion. With the help of this report, they can decide whether or not to invest into the shares of a particular company. Moreover, bigger organizations could decide if a specific company is a profitable purchase or not.