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 that you own the liabilities that you owe and the capital that 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 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 every month 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 and standards set by accounting
bodies that govern that organization audits are also conducted.
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.
- Appointment
Internal auditors are company employees whilst external auditors are appointed by a shareholder's vote and guided by the directors of the company
2. Objectives
The objectives of internal auditors are to examine issues related to company business practices and risks. The objectives of external auditors are to examine the financial records and issue an opinion on the financial statements of the company.
3. Responsibilities
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 keep 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.
Thanks for a great tips, This would be a different idea from the routine tips
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