There are many ways that companies, their partners, and administrators can be condemned by commercial, civil, and criminal laws for not keeping their accounting in order.
Whether for not taking documentation related to the operational transaction seriously, doing business outside the corporate purpose, mixing, or confusing the partner’s and company’s private assets, committing deviations, or even hiring an unprepared and unqualified professional.
Audit and Accounting Services are the souls of companies that help in recording all acts and facts. If the business owner’s actions are correct, for example:
- He keeps adequate documentation,
- Conduct business transactions under the company’s objectives,
- And his reflex is immediate.
Then accounting is considered transparent. Otherwise, it can be used to incriminate the company, with repercussions on partners, administrators, and accountants who were remiss and sloppy.
To assist in decision-making on tax-related issues, accounting also contributes to identifying the rates of losses and profits during a certain period, and the size of the assets and liabilities of the company.
The special importance of Account Audit Service in India lies in its primary role in achieving the following:
- Contribute to providing a clear analysis of all financial operations, and then recording them in legal accounting documents.
- Classification and arrangement of financial operations; to summarize it to help companies know the value of their revenues, and the costs involved in obtaining them.
- Knowing the business results of the facility in terms of losses or profits and making sure to clarify the nature of the financial position during a specific period.
Accounting is a business language because it helps the administration to collect data and accounting information when needed and according to appropriate times which contributes to supporting decision-making.
An accounting audit is an audit to confirm that the financial statements prepared by the company are correct. It is to protect stakeholders. When it comes to a large company, many people, such as shareholders and investors, have invested in the company.
From the point of view of investing, we want to accurately grasp information such as “whether the investee company is making a solid profit” and “whether the assets are being used effectively”.
To do this, we need to check that the financial statements published by the company are correct and provide stakeholders with genuine and correct information. In short, audits are needed to check that stakeholders are being provided with the correct information.
Auditing is one of the most important things for many companies. By conducting an audit, the management of the company can be put into a proper state and the credibility of the company can be improved.
To put it simply, an audit is to check whether the business of the company is being performed correctly and whether the business is proceeding following the standards to be observed such as company rules and laws. Therefore, if there is a problem, auditors will point out and give guidance so that proper work can be done.
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