Financial statements are critical documents when it comes to making crucial financial decisions. The importance of these documents can be realized when the firm requires financial assistance. Investors and creditors like banks always need a look at financial statements when granting funds to a company. An external auditor must audit these statements to be valid.
There are numerous advantages of having audited financial statements. The matter is not only of concern to external debtors but also to internal affairs. For better performance and improved activities of a business, audited financial statements are vital. This article will explain how financial statements can help a company improve its business activities. Also, we will discuss why external parties are interested in your audited financial statements.
Why need an audit?
Companies opt for internal audit to throw all the errors out of the window. An internal audit is an attempt to make things in line with the external audit. Hiring an internal auditor will assess your financial documents and your corporate environment and necessary amendments if any. All the businesses need an audit because it is in compliance with the set rules and regulations. If your business needs financial assistance, you will offer your statements to the lending parties. Having audited financial statements wins their trust; hence they will lend you funds.
Importance of audited financial statements:
As discussed, audited financial statements concern internal and external parties. The internal party refers to the corporate environment and members of your business. The external parties include the lending parties like creditors, investors, and shareholders. Having top audit firms in Dubai onboard can help your business achieve the following benefits.
Detailed Business Analysis:
An audit process incorporates a detailed assessment of your business activities. As a business owner, you can get a final and detailed report of your business in hand. The auditor makes conclusive points based on the input you provide. A critical analysis of financial statements will give a vivid picture of how your business is working. You can focus on the weak points of your business and fix them once the audit is completed.
Better serve business needs:
Having fair and audited financial statements means you can serve your business needs efficiently. Businesses need funds at the time which the company doesn’t have at hand. These statements can greatly help for the financial assistance from external parties like banks and other lending institutions. After a detailed analysis of your financial statements, the lending institutions will grant you financial assistance.
Builds an element of trust:
Why would an external party trust you enough to grant you funds? The reason is audited financial statements. These documents reflect an image of your financial position and credibility. The lender will only lend you money when he realizes you are in a position to pay it back. This builds trust among your business and the external parties. Having audited financial statements means your business is fair enough to be trusted.
Improved credit ratings:
When we talk about business reputation and brand image, credit rating comes into mind. Your bank, creditors, and shareholders must know about your credit rating. If you are doing well on all fronts, you can attract new potential investors. Good credit rating is granted to those firms who are compliant with all the set standards. If your financial statements are fair enough and audited, you can have improved credit ratings.
Businesses need to be reliable and trustworthy if they are to survive in a competitive marketplace. Large corporations often have shareholders in top management who want the business to be reliable. A regular audit of your financial statements means that you can clearly understand your business’s reliability. It ensures them that everything is going as planned.
Helpful in Tax matters:
A tax return is the most important aspect for any business, no matter how big or small. It would help if you were compliant with all the tax rules and regulations. It would be best if your business exhibited reliability to tax officials when they are at your door. An audited financial statement record would be the best source to satisfy the tax officials on all the tax matters. Businesses often lack such info; that is why they need top audit firms in Dubai. Having these professionals on board would greatly help you know these critical terms.
Why need an internal auditor?
External audits are always a sign of threat to many businesses if they have anything in disarray. Having an internal auditor in place can help you overcome these weak points can make your business compliant with the rules. The role of auditors cannot be overstated since they offer great assistance to you and your business. Businesses need to have top audit firms in place to keep their business going in the right direction.