Any company in India needs to get their accounts audited (statutory) on a mandatory basis. There are other audits such as tax audit and internal audit which has certain criteria on the basis of which it is decided whether these audits are needed. Individual practicing Chartered Accountants qualified to do the audit or a firm of chartered Accountants qualified to do audit shall be the company audit service provider in India. The cost of audit service in India depends on the size and volume of the work. One should always check the eligibility to be appointed the auditor of the company.
There are several benefits of the audit of the company. Major benefits are listed below
Good for your business:
Effective internal control to facilitate supervision and monitoring helps Prevent and detect irregular transactions, feedback on ongoing performance, maintain adequate business records and to promote operational productivity. Internal audit prevents the risk of irregularity and fraud.
Related Blog: STATUTORY AUDIT OF FINANCIAL STATEMENTS OF COMPANY
Risk of Misstatement:
Auditors assess the risk of material misstatement in a company’s financial statement. Without a system of internal controls a companies financial statements cannot be relied upon by stakeholders.
Fraud Prevention:
Internal audit is crucial for any business in fraud prevention. Recurring analysis of a company’s operations and maintaining rigorous systems of internal controls can prevent and detect various forms of fraud and other accounting irregularities. Audit professionals assist in the design and modification of internal control systems the purpose of which includes, among other things, fraud prevention.
Cost of Capital:
The cost of capital is important for every company, regardless of its size. Cost of capital is largely comprised of the risk associated with an investment, and if an investment has more risk, an investor will require a higher rate of return to invest. Strong audit systems can reduce various forms of risk in an enterprise
Related Blog: HOW AND WHY YOU SHOULD CONDUCT A COMPANY AUDIT?
Chartered Accountant by profession, CA Sanket Agarwal has an experience of above11 years in Cross Border compliance , Import Export , International Taxation & is a passionate content creator.