Why auditing is such an important topic to business and the professional accounting profession
The auditing is important to the business and the professional accounting profession as it is the sources of assessing the efficiency of the internal controls of the company. In addition to this it helps the company to achieve successfully the objective of the company’s business by providing the company reliable financial reporting on the current situation of its operations. The company can minimize its cost of capital, prevent fraud and misappropriation of its assets. Fraud protection is a major benefit that is achieved through the auditing that prevent and discover the accounting misdeeds. The financial reliability of the companies is strengthened by auditing that reduces the cost of the capital and the risks.
Auditing is important as it assists the company to follow and achieve its several corporate objectives. The company would not be able to generate consistent financial reports for the business internal or external dedications with the effective auditing system. The financial analyst in the company uses auditing in order to determine the value of the enterprise’s shares. The professionals of auditing professionals places a vital role in the capital markets. Apparent, helpful and correct financial reporting are the essence of the capital markets as well as essential for investors to make knowledgeable decisions by means of how to distribute their capital.
The importance of the auditing to the professional accounting profession is that it ensures the quality of the financial reporting. It also delivers advice to the businesses to reduce their costs, improve their products and serving offerings along with the mitigation of the risks. The professional accounting profession understands the situation of the company and the environment in which it operates.Additionally, the training in the profession of the accounting allows the auditors to adopt the practical and neutral methodology to solve issues of the company.
Furthermore, an auditing is important because it enable the company to identify how to distribute its assets and resources as well as also helps the company to recognize which segments and products of the company are profitable and which are not. With the help of auditing, the company can gain a reasonable standpoint of the financial statements. Likewise the prospective investors and creditors make their investment decisions by looking at the financial statements. Another reason for the importance of the auditing is that it defends the public from the fraud and scam business dealings.
Auditing plays an important role as it improves the economic growth, increase the variety and value of the business transactions in which the companies’ wants enter to increase their profitability. The auditing provides the grounds that define the essential steps to the companies with the purpose of continuous improvement. Auditing is important for the business as the company can take the advice from the auditors them related to their current and future expected business activities. The professionals involve in the auditing are highly trained and qualified that help the company efficiently.
The enormous expansion in the business industry since its revolution has increased the importance of the auditing along with the professional accounting profession. The requirement of the development of a complex accounting methods is limited when the enterprises are extremely small and mainly managed by their owners. But with the increase in the scales of operations and capital investment, it becomes essential for the managers to present the financial accounts at regular interval to their shareholders. In addition to this the increment in the size of the companies and the greater complexity in the accounting procedures has increased the demand of the auditing. This will raise the need for the manager of the company to provide the financial aspects of their business operations and activities to the owners of the company and the other providers of the funds. Therefore, it is important that the accounts of the company’s is only audited by the qualified accountants that are members of the organized specialized bodies.
Nowadays, the companies with the multiple business operations which make it difficult for them to prepare financial accounts by themselves. As it is a very difficult and complex task that involves summarizing and analyzing the financial accounts with the different resolutions. The income tax authorities normally receive the financial account organized by the qualified auditor without a deep look into the aspect of the accounts. Additionally, accountant and the tax collectors are benefiting from an auditing as an audit identifies accounting problems and provide the up to date evidence on techniques, rules, and regulations.....................
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