Pros and Cons of Auditing
Every business owner whether he is a full owner or part-owner like a shareholder wants to know about the health of his business. Auditing is a tool to do just that. SBS Consulting, a Singapore bookkeeping, accounting, and auditing firm, is there to help business enterprises to take a health check. This auditing firm in Singapore helps owners in understanding the present prospects of the business, and to make projections about its future. Following merits and limitations of auditing shows how much reliable business diagnostic tool it is.
Pros of Auditing
- Company Accounts – Auditing emphasizes the need of continual updation and maintenance of company accounts.
- Financial State – A comprehensive auditing report presents true facts about the present financial state of the business in details.
- Profit or Loss – It helps the business owner to arrive at precise profit or loss incurred by the business.
- Company Assets – Audit firms in Singapore helps an owner in arriving at the market value of the company by assessing the value of its assets.
- Tax – In countries such as Singapore, auditing report submission to regulating authorities is a must for companies. It helps them in dealing with tax issues.
- Financial Decisions – Auditing helps investors, shareholders and business owner in making financial decisions.
- Loan – Auditing brings a company’s strength as well as its shortcomings to the notice of financial institutions. Depending on that these institutions take proper decisions about the loan to the company.
- Exchange of Views – A detailed report prepared by SBS Consultancy, an audit company in Singapore, brings strength, weakness, threats and opportunities of the business in the open. It opens up discussions and exchange of views about present and the future course of the company.
- Financial Irregularities – Moreover, the process of auditing itself can help find and pinpoint financial irregularities in the conduct of the business.
- Legal Document – An audited report is a legal document and can be presented to the court of law as evidence in support of company. This helps in settling claims against the company as well as partnership issues.
Cons of Auditing
- Accounting Principles – For various reasons, businesses use different accounting principles. It is auditor’s duty to know about them and proceed accordingly, to avoid misinterpretation of data. Auditing firms in Singapore are well versed with this issue. SBS Consultancy makes it an easy sailing for its clients.
- Difference of Opinions – Auditors using same set of financial statements can arrive at different conclusions which may create complications.
- Fraud/Error Detection – It may not be possible for the auditor to uncover smartly hidden financial irregularities from the financial statements presented.
- Monetary Unit Principle – An audited report is based on the assumption that the currency is stable over the period under consideration. In practice it is not true and because of this, it may not reveal true financial state of the company.
- Influence – Under the influence of management or for some other reason, auditor may come up with a biased audit. That is why associating with a reputed audit company in Singapore like SBS Consultancy is a must for an image conscious company.