When was the last time you conducted a third-party audit of all business financial statements? Many arguments arise against self-conducted tax audits, yet one aspect cannot be overlooked.Tax audits—whether conducted internally or externally—can help businesses uncover problems and financial discrepancies, ensuring efficiency.
In fact, main reasons to conduct an audit are:
- Ensure effective operation of your business
- Review compliance utilizing various administrative regulations
- Increasing confidence in management of the business
- Increase ability to solve potential challenges
- Maintaining/enhancing organization’s reputation in the industry
- Performing due diligence for shareholders or potential investors
External audits, i.e. by third party auditors, are usually conducted by a regulatory or governmental agency (like the IRS). Don’t know what to expect from a third party audit? There are six specific steps involved in the audit process that need to be followed.
The organization is notified of an upcoming audit. The auditor requests documents listed in the audit checklist.
These documents typically include a copy of original bank statements, receipts, ledgers as well as previous audit report.
The end steps of a typical audit procedure includes drafting final report and meeting with upper management of the company.
You can make sure the audit process runs smoothly by providing aid to the professional conducting the audit. Following are the two most crucial responsibilities business owners and managers must perform:
Meeting All Audit Related Obligations
Registration, reporting, filing, and payment are obligations that must be followed for an accurate audit result. It’s your responsibility as an operating business to ensure compliance with all tax obligations.
The respective audit organization will investigate whether or not your business has properly filed all tax documents over the past few years. It’s important to report, register, and file obligations even when payments aren’t being made on time.
Providing Financial Books and Records on Request
The auditor will request all financial books, records, receipts and bank statements to ensure accurate audit results. Don’t know how to organize your company’s financial information? Take help from accounting and tax services for this task.
Organizing all financial information will only help the audit process operate more smoothly and faster.
Do you know what your first duty as a business owner is? Finding ways to save money that can be used in various business operations. Schedule a consultation with Enguard today.