Importance of Auditing system for Your Company

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Importance of Auditing system for Your Company

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Are you interested in having a standard statutory audit system as part of your company management system? If your answer is YES, then this article is for you. In this article you will get to know the essence of an auditor in auditing financial statements. In addition, knowledge about the objectives and importance of auditing report and auditing system for your company.

Omoreover, this article will help equip you with all audit related business issues of your business. It will also help you define and apply the necessary approaches you require to fit in a good audit system for your business. Therefore, this post will aid you know the importance of auditing system for your company. It will aid you relate with Complete Full Marks Consultants Limited, an Accounting & Auditing firm that can assist you design and manage your company auditing system. Meanwhile, I urge you to read along and contact us as you have need for explanations and for audit assignments.

Importance of Auditing system for Your Company – Statutory Audit:

In the first place, what is a statutory audit? A statutory audit is an audit conducted by external auditor in accordance with a country’s company and allied matters act, as in Nigeria. This is with regard to accounting and auditing standards. Therefore, by statutory audit, the auditor provides an independent opinion to the shareholders on the truth and fairness of the financial statements. Indeed, it states whether the financial statements have been properly prepared in accordance with the Companies Act requirements.

The Benefits & Importance of a Statutory Audit for Your Business:

These re your benefits if you get us involved in your business auditing;

It exposes frauds. Even though this is not the main purpose of external audit, but along the process all deliberate errors and frauds re revealed.
It exposes errors – errors of omission, misstatement, measurement etc. re exposed by auditing.
It facilitates your business obtaining loans from banks and other financial institutions. Banks and financial institutions require to know the healthiness of your business through your financial statements before granting you the loan you request.
As a matter of fact, Audits help businesses uncover problems and ensure efficiency. Certain inefficiency issues are revealed simply by ratio analysis.
It sustains the reputation of your business. This is a good evidence of the healthiness of your business. So, it keeps your reputation intact.
It helps you get investors for your business expansion. Every investor would want to see your audited account to ascertain the healthiness of your business before committing fund into it.

Importance of Auditing system for Your Company

Furthermore;

Enables the Pursuit of Business Objectives – Your business determined objectives could be turnover, level of Net profit, Return on investment or equity etc. Your financial statement will showcase all of these.
It’s a means of educating business owner on the importance of accounting information in business. No matter your academic level, understanding your financial statement is a big level of knowledge.
Audit Scope is an important factor in all auditing. In addition, to the above, the scope of your business and its audit is a big knowledge for you

Assess the Risk of Misstatement – Regular audit will help you manage your business risk. Performing and underperforming facilities re thereby revealed. This will help you know how to share your EGGs.
It helps in protecting the interest of third parties. These are Persons who re not directly associated with enterprise like partners, creditors, debtors etc.
And, if you need government grant, your audited account will be required. Yes, if there is anything you require from government, including registration for certain business permits, your audited account will be required.
C.A.C annual returns – Your audited account is required here.
Audit acts as a moral check on employees. Morally, personnel would want to know the outcome of audit. Some audits indicts managers.
Again, it helps to settle trade disputes – There could be dispute with trade partners or associates, this documents which details your business net worth, will do the magic in settling certain trade disputes.
Audited account helps to settle accounts – at retirement, or death of partners and liquidation of company.
Audited account is what you need to file in for your tax clearance certificates. So, it helps you settle your tax liability.

Importance of Auditing system for Your Company

No Audited Account – No Annual Statutory Returns:

This is true. Until you have your financial statements ready for the year, your business may not be qualified to obtain Tax Clearance certificates from Federal or State Revenue authorities. So, not audited account, no annual tax returns.

Again, no audited account, no C.A.C. annual returns. This is another statutory annual returns that will keep your business reputation as a going-concern.

Furthermore, Contract bidding documentations – Yes, if you want to process your PENCOM, ITF, NSITF compliance certificates and the register at BPP data base as a federal government contractor, your audited account must be attached.

This is Where You Need Us:

As a matter of fact, you need us to prepare your audited account, internal control services, C.A.C annual returns, Tax returns for tax clearance certificates, PENCOM, ITF and NSITF compliance certificates, and other statutory assignments.

This is how you will fit in a good auditing system in your business and then get at the audit processes you require for your business

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Ane

Deacon Anekperechi Nworgu, a seasoned economist who transitioned into a chartered accountant, auditor, tax practitioner, and business consultant, brings with him a wealth of industry expertise spanning over 37 years.