It is a common perception that accountancy and auditing services are only for large firms. While that is true, such services are not only for the larger organizations. Individuals, self-employed persons, high net worth individuals, and even small businesses can benefit from accountancy and auditing services.
But first, let’s define accounting and auditing. Accounting is the collection of transactions and financial data that is compiled into financial statements for interpretation and analysis. These statements have several uses, from simply record keeping for regulatory bodies to supporting strategic business decisions. On the other hand, external auditing is the verification of the truthfulness of the financial statements. Auditors act as an independent perspective to authenticate achievements and help the company overcome challenges.
We hear a lot about these services and their importance, but there are also several misconceptions about accountancy and auditing.
Accountants will solve all of your financial problems.
While accountants offer professional advise on financial issues, their foremost job is to ensure that the financial affairs are in order and according to the governing body they are associated with.
Only large businesses need accountancy services.
Every individual and business can benefit from having the help of a professional who can help with tracking expenses, paying taxes, managing payroll, and creating budgets. Outsourcing the accounting function is both cost effective and time effective. An outsourced accounting function does not need to replace an existing internal accounting team. Rather, it acts as an extension and supports the internal accounting department when needed.
Accountancy services are expensive.
Several small businesses avoid seeking the help of professionals because they think they can manage their finances themselves and that it is not within their budget.
Outsourcing accounting services ensures that the business is being cost and time effective, because the workload is divided between another firm, not just one person or department. Additionally, accounting firms adopt a proactive approach with their clients, and offer guidance and advice on how to improve and strengthen their financial position. Finally, accounting firms help ensure compliance with regulatory bodies, avoiding late payment fees and overpaying.
Auditors only find errors or wrongdoings.
Companies may dread when their external audit is coming up. They might think that the auditor will purposely try to find errors and hold people accountable. The role of the auditor is to provide an independent and objective perspective of the company’s financial statements, ultimately, for the best interest of the company.
Auditors are only interested in the past.
An audit in itself is historical in nature as financial statements of a particular year are audited. However, audits bring about progress and growth. An audit should be viewed as a chance to identify pain points and take corrective action in order to strengthen the business and ensure continuity.
Auditors try to be a source of annoyance.
It is true that auditors adopt a questioning mindset. It is important to remember that the company and the auditor are working towards the same goal to conclude the audit effectively.
Planning ahead and preparing the necessary documentation prior to the audit helps remove obstacles which may be faced later on in the audit process. It is recommended to appoint a staff member to act as the auditor’s point of contact to facilitate communication.
Accountancy and auditing do not need to be an area of uncertainty. Reach out for more information and discover how you can benefit from such services.