Corporate auditing firms in India are needed for companies because audits can help a company to survive or find out and prevent fraud that occurs in a company so that it can be immediately prevented or overcome. In addition, audits can be used to evaluate or improve the effectiveness of a company.
For which parties is the audit useful?
- For the Audited Party
For the party or company being audited, the audit can increase the credibility of the financial statements so that the financial statements can be trusted by parties outside the entity such as shareholders, creditors, the government, and others.
Audits can prevent fraud that will occur or find fraud that has occurred so that it can be addressed immediately and so that the same incident does not happen again.
In addition, audits provide a more reliable basis for the preparation of Tax Returns submitted to the Government and open the door for the entry of external sources of financing. And lastly, an audit discloses errors and irregularities in financial records.
- For Other Members In The Business World
Here other members mean, for example, creditors or employees of the company itself. The first benefit is to provide a more convincing basis for creditors or partners to make credit decisions.
Second, audits can provide a more convincing basis for insurance companies to settle claims for insured losses.
Third, audits can provide investors and potential investors with a reliable basis for assessing investment performance.
Fourth, audits can provide an objective basis for trade unions and audited parties to resolve disputes regarding wages and benefits.
- For Government Agencies or Parties
The benefits of an audit can provide additional independent assurance about the accuracy of the company’s financial statements as a tax base.
In addition, the benefits of an audit can provide an independent basis for those who are engaged in law to manage inheritance and safekeeping assets, resolve problems in bankruptcy and determine the implementation of partnership agreements in a proper manner.
Why is an audit of financial statements a must?
A financial statement audit or more often called a financial audit is an examination carried out to test the reliability of financial transactions, accounting records, and financial statements.
This audit is important because, first, certain individuals can carry out or make fictitious transactions that can harm the company.
Secondly, it is necessary because of differences in interests that can cause problems between financial statement makers (accountants) and stakeholders.
Third, if the company wants to apply for credit or investment, investors and creditors rely on valid financial reports to decide on lending or investing.
Fourth, in addition to the publication of audited financial statements, more and more potential investors are increasingly convinced of the quality of financial reports, which can be used as land for investment.
Fifth, when the stakeholders want to examine the financial statements to ensure their conformity with the actual information, the stakeholders have limited access due to time, accuracy, and energy constraints, so corporate auditing firms in India are needed.
This content is meant for information only and should not be considered as an advice or legal opinion, or otherwise. AKGVG & Associates does not intend to advertise its services through this.
Posted by:
CA Aman Aggarwal
AKGVG & Associates