Tag Archives: accounting audit

Receiving Your Accounting Audit Before Filing

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Your Accounting Audit

Must be received before filing.

Accounting AuditA company’s lifeblood, employees are a precious resource that ultimately determines whether a business will profit or fail. Unfortunately, when they are mismanaged, workers can act like anchors, towing businesses toward their demise. If you own a company, you need to make sure your taxes, regardless whose overseeing them, are done correctly which means a second look is warranted.  Here’s several scenarios where taxation in various platforms nearly requires an internal, or outsourced, audit.

Charities Need Them

First and foremost, it is important to know that charities must be prepared, by law, to have their accounts maintained and up to date and accessible to all interested parties when requested. In order to comply with the strict regulations and rules as set out in the 501 forms filled out, an individual or firm is required to manage the accounting and reporting of the charity’s records who will be able to keep them clear and concise and transparent at all times.  This means it would behoove anyone interested in

The accounts are the evidence of an organization’s financial health, and consequently show how well it is being managed which subsequent accounting audit necessities would be much easier to conduct.

Business Taxation Requires Them

When you start your own business there are so many things to take into consideration that it can be difficult, even off-putting to know where to start. For many people, completing your first tax return is the most daunting task of all. With so many different taxes, complex legislation and a mountain of paperwork to complete, a recent study found the majority of people put off returning their self-assessment until the very last day – an egregious mistake that perhaps an accounting audit could remedy before it’s too late.

Fortunately, taxation is more straightforward than it seems, and getting your head round it is an important step as you build your new business, yet outsourced accountants could make your life easier and keep your books intact.

Financial Software Does Help…

It is usually of the utmost importance for any business these days to know precisely how they want to manage their finances and accounts, particularly on the Internet. For this reason, obtaining QuickBooks software programs is a superb way for any business to go about their own accounting on the Internet. Although many feel accounting software does it all, it’s still suggested that you seek an accounting audit before filing business or personal taxes with complex deductions since amended tax returns could cost more headache, and money.

Recover Lost Profits with an Accounting Audit

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An inefficient accounting system can cost you money. Duplicating payments, overlooking billing errors, and over paying taxes are just some of the ways that inefficiency in your accounting can cost your business. Problems with accounts receivable aspects, such as delaying the sending of invoices or neglecting overdue accounts, can also take a bite out of your profits. If you have concerns about the efficiency or effectiveness of the accounting operations of your business, then consider hiring a professional to conduct an accounting audit for you.

Errors

By discovering how your accounting system is costing you money, you can work on solving the problems, which will increase your profits. Not only will an audit find your accounting errors, but it will also find out why errors were made. For example, if overpayments are being made, an audit can discover the reasons for it. It may be that your software needs an adjustment, or it could be an error in the practice of your accountants. If you are losing money in many ways, such as over payments, duplicate payments or accrual errors, then an audit will detect the number and scope of the errors. Every error that costs you money reduces your profit margin, and understanding the reasons behind the errors is crucial to preventing the same kind in the future. Whatever the accounting problem may be, an accounting audit is the first step towards solving it.

Business Growth

If your business has grown, it is likely that your accounting system may not be growing with it. More business means more complexities, and complexities lead to errors. An audit of your accounting practices can determine if there is a need for additional employees in your accounting department, or if your current employees need additional training to manage new responsibilities. While good accounting software is a great start, your employees are just as important. Especially with the changes each year in tax laws and regulations, it is important that your accountants are up to date at all times on all of the tax changes that affect your bottom line. An accounting audit can reveal errors that have occurred in deductions that are costing you money.

A complete analysis of your accounting system by a professional and experienced auditor can not only find and recover errors, but it will help you devise new financial strategies. The percentage of the recovered money paid to the auditor will be made back many times over by finding and solving problems in your accounting system. Even errors of a few cents can add up over time, and audits often find errors considerably larger being made all of the time. An online registry of professional accountants, such as Goodaccountants.com, can provide you with a professional to conduct an accounting audit on your business.

The Duties Of An Accountant And Auditor – Infographic

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Here is an infographic that shows the duties of an accountant and an auditor. Many people are unsure about the specific job duties of these positions, so we wanted to clear it up for a final time! Please let us know what you think about the infographic, and comment on the post if you want to add anything that we didn’t include in our infographic!
Learn about the duties and responsibilities of an accountant and auditor

What is An Accounting Audit?

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accounting audit An accounting audit is a type of financial check that is done externally to monitor a company’s accounting methods.  This check is used to verify financial information has been compiled in a manner that is in accordance with standard practices and there are no errors.  A specialized type of accounting firm, known as an auditing firm performs these external checks.  There are some industries that require companies to submit their books for auditing on an annual basis, to ensure nothing is being overlooked or erroneously reported, either intentionally or unintentionally.

Accounting audits play a very important role in the business world and there is a certain amount of finesse that goes into the process in order to verify the accounting process is done correctly yet the client company is pleased and an ongoing business relationship is established.  This is because if an auditing firm finds many errors and questionable items on a client company’s accounting records, it is very possible the company would opt to not use that firm’s services again.

On the other hand, if the auditing firm is too lax and does not properly analyze the data, the integrity of the financial accounts of the company being subjected to the audit cannot be guaranteed.  If the company were to suffer a major financial issue, the accounting audit would be called into question, and the reputation of the auditing firm would also be looked into.  The auditing firm may suffer just as much as the company being scrutinized since it may lose business from other companies because of these serious issues.

It is very important that accounting audits be conducted on a regular basis, in a proper manner, by a reputable company.  Being able to know for complete certainty that your financial records are complete, accurate, and up to date is extremely important in the business world.  This will help companies to quickly identify many serious situations that could crop up such as someone embezzling from the company, missing accounts, reporting errors, or internal fraud.

When a company takes the steps necessary to complete these types of audits, and the auditing firm completes them in the correct way, to a high standard, information can be accessed promptly, presented to organizations that request it, and it will not be questioned for authenticity or accuracy.  This level of care and trust can truly make or break a company; especially in today’s extremely competitive marketplace.

Purpose of Auditing Firms

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Businesses large and sauditing firmsmall have used auditing firms in the past to ensure the financial responsibility of the company and produce a determination that the business is financially sound and more.  Auditing firms are third-party entities which review the financial aspects of a company by reviewing the financial paperwork and determining the current financial status of a company.  The following will detail the purpose of an auditing firm and highlight why such a third-party entity is important.

What Does An Auditing Firm Do?

An auditing firm will review the various financial aspects of a company and create a detailed report thereafter reporting the findings.  This usually occurs once per year and gives the company owner and its department officials insight into how the business is doing with the state of their finances.  The auditing firm is paid by the business and completes their work with efficiency and thoroughness.

Why Auditing Firms Are Important

Auditing firms are extremely important for a few different reasons.  First, a firm which completes audits for entities ranging from small, privately-owned businesses to large corporations provides the business with a clear picture of their financial status.  In addition, this type of firm compiles the proper information to let shareholders and company clients know how the company is faring.

Also, firms which complete audits help the businesses whom they audit to show that their dealings are fair and honest.  Since the audit firms are independent of the company, they offer a true picture of the state of the company and their finances.  Therefore, outsiders can trust the information and know that it is not coming directly from the company which the audit covers but from an outside auditing entity instead.

In addition, audits of this type help the business and its owners prepare for the future.  The results let the business owners know what their financial status currently is and can use this information to properly proceed in business into the future.  They can tailor future expenses to the results received due to the audit and their shareholders can feel at ease knowing the financial state of the company in which they hold stock in.

Using an auditing firm is a wise move for any business to make.  It will keep the business firmly grounded and help to make it even more of a success in the years which follow.  There are many excellent audit firms out there today and plenty to choose from when it comes time to pick a firm to audit your business.

The Best Advice Bookkeepers Can Give

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When you own a business, finding a bookkeeper who can help you stay on top of payroll, expenses, and income is crucial.  Managing your numbers helps you ensure that your company is maximizing its profit potential and makes it easy to share your financial data with lenders whenever they request a report, and it also ensures that tax time is as stress and hassle-free as possible.  Proper bookkeeping is a lifesaver in the event of an audit, and the simple fact is that it makes managing the day to day operations of your business much easier.  Taking advice offered by your bookkeeper can often pay off handsomely, and the right advice can be huge.

Finding a Bookkeeper You Can Rely On

If you were to ask most professional bookkeepers what one piece of advice they would most like to offer business owners, it would likely be to stress the importance of hiring an expert.  While turning over your financial records to a savvy individual may work well for a fledgling self-employment setup, new tax laws, taking on more employees, and increasing your business load can all quickly create a situation that is unmanageable.  Taking the time to find a bookkeeper at the start so that they are familiar with how your business works and how you are spending and making money can really keep everything running smoothly no matter what turns your business takes.

Managing your own payments and expenses can often lead to missed deductions, failure to create properly formatted reports for lending agencies, and even an increased risk of audits when tax season rolls around.  If you take the time to find a bookkeeper who has the experience and training necessary to handle your specific business situation, you will find that he or she can easily help you see where cuts or adjustments need to be made, as well as what areas of your business are proving the most (or least) cost effective.

The Right Expert Makes a Big Difference

No matter how you look at it, choosing the right bookkeeper for your needs is going to make a big difference for your company.  Trying to do it all on your own takes your focus off of your business.  If your company is small, you won’t need to employ someone on a full time basis in order to reap the benefits, but you should have someone who is qualified to handle your numbers for you.  A great bookkeeper is as essential as a solid business model, and it can really expand your overall bottom line.

Accounting Audit: Bad for Your Business?

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Accounting Audit: Bad for Your Business?

Aside from the word bankruptcy, there is probably not another word more feared by businesses than audit.  However, an accounting audit is not necessarily a bad thing for your business.  In fact, in some cases, an audit can actually help your company save money and eventually increase your company’s overall profit and performance.

There are basically two forms of audits: an internal audit and one conducted externally, typically by the IRS.  If you are a professional business maintains accurate and honest records:  neither audit should be feared.  In fact, both types can help highlight areas where your company could improve.

The Benefits of an Internal Audit

Hiring a professional company to conduct an internal audit is typically an extremely effective practice.  Internal auditors are objective individuals who will take the time to evaluate and question each aspect of your business.  At the end of their review, they will provide your company with a list of recommendations.  It is ultimately your company’s decision on whether or not these recommendations should be implemented.

Internal audits can provide the following for your company:

  • A strong, organized accounting system
  • Eliminate or reduce the risk of internal fraud
  • Highlight potential areas of loss and/or missed revenue
  • Decrease the possibility of an external audit

However, internal audits are dependent on the auditor’s ability to recognize whether the information being provided to them is accurate and complete.  To increase the success of your accounting audit, hire a company that is familiar with your industry’s specific needs and challenges. Once hired, be certain to give them enough time to thoroughly evaluate all aspects of your company.

The External Audit

External audits are probably one of the most feared items by all businesses. However, there are ways to come out of this process successfully and hopefully a bit more informed.

When you are notified of an external audit, become familiar with all financial aspects of your business.   Set up a meeting with your accountant and discuss your company’s tax return and where all of the backup material is retained.   When the auditors arrive, answer all questions honestly and readily provide them with the information that they are requesting.  Ideally, the auditors will be satisfied with your response and their file can be closed.

In general, an accounting audit is not a bad thing for your business.  In fact, a thorough internal audit can actually help your company increase its overall profit.