Most Important things for Financial Audit Statement
Hi in this article we are going to learn about the important financial audited statements to have in any organization. So financial statements help you manage your business by showing you where the money came from where it's going and where it is now that way you ensure that you have a healthy business
The three most important financial statements are
The balance sheet
The balance sheet highlights the assets which you own the liabilities what you owe and the capital what is owed to the owners the assets equal the liabilities plus the capital
2. Profit or loss sheet
The profit or loss sheet also called the PNL or the income statement and this highlights your sales and revenue for the year minus
3. Cash flow statement
This cash flow statement highlights the inflow and outflow of cash the statement is updated on a monthly basis because it's important to ensure that you always have enough cash to cover your operating expenses.
Auditing For Your Business
You will learn about audits and the differences between internal and external audits. Audits are official inspections of an organization's accounts typically conducted by an independent body.
Many large organizations also have their own internal audit departments. Audits are conducted to confirm that an organization is operating within the guidelines standards set by accounting bodies that govern that organization audits are also conducted.
So as to a certain that the financial results are presented fairly and that there is no fraud taking place in the organization
There are many differences between internal and external auditors these can be split into three sections.
Internal auditors are company employees whilst external auditors are appointed by a shareholders vote and guided by the directors of the company
The objectives of internal auditors are to examine issues related to company business practices and risks. While the objectives of external auditors are to examine the financial records and issue an opinion on the financial statements of the company.
The internal audit department is responsible for the company's senior management whereby external auditors are held responsible to shareholders
Internal audits are conducted throughout the year moving from one department to another whereby their internal audit reports are used by management
External audits are conducted yearly at the close of an organization's accounts the external audit reports that are generated are not only used by external parties as mentioned earlier but also by internal management for budget meetings strategic planning and annual reviews.
If you are a publicly listed firm a large organization or just a company that is looking for funding from investors of lenders favorable opinions on your financial audited statements by external auditors will help you along your way.
If you are lucky to have an internal audit department within your organization then they will guide you in making sure that the company's results are fair and accurate before the external auditors come waltzing through your company do you.
There are a lot of things to be done in an organization, and it is always not easy to comply with the legal requirements and keeping track of business strategies to be consistently in the race with businesses.
With this, the Auditing side of a firm is quite difficult to manage that’s why auditing services in Dubai are being offered by various firms as outsourcing is a major option for companies.