Why is auditing needed

One of the decisions an organization faces during its annual budget process is whether or not to engage an external CPA firm to conduct an audit of its financial statements.

An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. This is arguably the most important part of an audit and where many organizations can find a significant amount of value from having an audit conducted. While no opinion is placed on the effectiveness of internal controls by the auditors, they can help identify areas where the organization may be susceptible to fraud or malfeasance.

Further, an audit can help organizational staff identify areas where efficiencies may be realized as auditors typically work with a variety of organizations and are aware of best practices and trends in the industry. Overall an audit can be a very useful tool for the organization, both externally to funders and potential donors, as well as internally to find ways to safeguard assets and streamline processes related to financial reporting.

While there may be a cost involved on an annual basis for an audit, the cost can also be viewed as an investment in the organization to help ensure that best practices are being followed and to ensure an accurate financial picture of the organization is being presented to the users of the financial statements. Join our email list to receive our most recent blog posts, notification of upcoming seminars, and access to new resources!

This assurance is provided by independent third party. Audited financial statements in accordance with accounting principles generally accepted in the United States of America include accruals such as accounts receivable and accrued liabilities not included in certain tax basis financial statements.

Here are a few reasons business owners and managers come to ShindelRock for an audit of their financial statements:. Of course there are many instances in which audited financial statements are required such as: certain debt requirements, board requirements and a long list of regulatory requirements.

The above benefits of having an audit apply to these companies too. Another option for companies not required to have an audit is to obtain reviewed financial statements. We detail the difference between a review, compilation, and an audit here. To speak to a partner or for more information about the audit and compliance services we offer please contact one of the Menzies LLP offices or complete our contact from below.

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