Here are some Advantages of Audit carrying out this process in your company: An audit requires planning on the part of the company. Choosing an auditing firm that will carry it out is not an easy matter , since you must ensure that it is a professional.
Advantages of Audit For Business, Owner And Government.
ERRORS
Through, auditing, detection and prevention of errors becomes possible. The employees in charge of become regular, careful and systematic in their work.
- DETECTION AND PREVENTION OF FRAUD
Audit is also helpful to discover and to prevent the fraud. The guilty persons can be held responsible.! The audited accounts show the true and fair view of the business.
- BUSINESS PURCHASE PRICE
If a running business is to be sold, purchase considerations can easily be determined on the basis of audited accounts’ After audit, real value of assets and liabilities comes before us.
- LOAN
Business can easily obtain the loan with the help of audited accounts because audited accounts arc easily accepted by the lenders for granting loan.
- TAX PAYMENTS
If accounts arc audited then these arc easily accepted by the tax department for the assessment of tax and there is no need of further inquiry.
- VALUABLE SUGGESTIONS
Businessmen can get advice from the auditor about the weaknesses of their business or accounts. Auditor is a professional and expert, so his professionalism is complete guideline for management.
- RELIABILITY
Suppliers, customers and creditors are ready to deal only with those companies which present the audited accounts. Accounts without auditor’s approval are useless for decision makers.
- GOODWILL
Audit is one of the chief elements due to which company enjoys goodwill. It is easy to sell business at handsome price as purchaser feels minimum needs of investigation in case of audited accounts.
- SETTLEMENT OF DISPUTES
If any dispute is raised among directors, partners or shareholders that can be solved by auditor. Auditor is a neutral person, so his decision is acceptable for all parties.^ ADVANTAGES OF
In the presence of audit, the owners feel satisfaction about business operation and working.
IL WEAK POINTS
Audit is the way of finding the weak points of internal control. In this way efficiency of management can be increased.
- NO EXPLOITATION OF SHAREHOLDERS
Audit is the way to avoid exploitation of shareholders. Shareholders who have no hand in running the business can watch business through auditor. So directors can not take undue advantage of their positions.
- EFFICIENCY
Audit determines the efficiency of employees. The efficient management is an asset for business. We can change duties of employees according to their abilities.
PARTNER’S TRUST
If accounts are audited then the partners easily trust on these accounts for knowing the value of goodwill and assets at the time of retirement, death or admission of new partner. •
15 DECEASED ESTATE
If the accounts are audited then the family of deceased person can rely on these accounts for distributing i he estate.
. FLUCTUATION IN PROFIT
If accounts are audited then owners can easily know that what are the reasons for fluctuation of profit.
- MAKING OF BUDGET
If accounts are audited then owners can easily know the true and fair view about their business activities and i hey can make the budget for next year.
- SETTLEMENT OF DISPUTESS
If any dispute is arise among directors, partners or shareholders that can be solved by auditor. Auditor is a neutral person, so his decision is acceptable ‘for all parties.
- EASY ASSESSMENT OF TAXES
In the presence of audited accounts the tax authorities can easily assess the income and thus pass the assessment order.
- EARLY RECOVERY OF TAXES
As the assessment orders can easily be made, it will lead to adds early recovery of taxes.
- ECONOMIC PROGRESS
The government can check the economic progress of the various companies by going rough the audited accounts and thus can know the overall position of a particular kind of business in the country and thus take proper action for that.
- LEADING OF ECONOMIC PROGRESS
The joint stock companies have played a major role in boosting up the economic progress of a country in the modern age. I he successful operation of the companies would have not been possible without the presence of audit Thus audit leads to economic progress.
- PRIVATIZATION OF INDUSTRIES
If industries arc running in loss then government can privatize them after going through the audited accounts of these industries.
ADVANTAGES TO GENERAL PUBLIC AND TO OTHERS
- PUBLIC’S SATISFACTION
If accounts arc audited then general public easily satisfy about the business operation.
- SETTLEMENT OF INSURANCE CLAIMS
If accounts arc audited then insurance claims are easily settled because insurance companies can easily know the actual loss through audited accounts.
- NO LENDER’S LOSS
There may be no loss to lenders because banks and other financial institutions get the audited accounts before granting loan and with the help of audited accounts they an check the trust worthiness of customers.
- BETTER PAY
Audited accounts provide the true and fair view of profit. So employees can demand higher pay.
- INVESTOR’S Satisfaction
fee investors can easily judge the position ol company and thus make the decision to invest in one* company and not in others.
- PURCHASE PRICE
Audited accounts provide information about net worth of any business, the people interested in purchasing the business can determine the reasonable purchase price.
EMPLOYMENT OPPORTUNITIES
As organization and businesses are expanding; the need of audit is increasing. So this field is providing more and more job opportunities to the thousands of people.