Having Audit Assurance Is Generally Beneficial In Various Ways
Business owners should start considering auditing financial statements as an investment rather than as a cost. Regardless of exempt status for small companies, having audit assurance is generally beneficial in various ways.
In this blog, we will discuss the advantages of audit assurance.
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Companies of all sizes should invest in audit assurance as audits offer compelling advantages: |
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| Attracts Investors | It is common for potential investors to want to review audited accounts when considering an investment or sale.
A closer look at a business through the eyes of a skilled business professional ensures users are more confident that the information presented to them is reliable as it gives more credibility to business reporting processes. |
| Bank Loan Processing
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Aids the process of obtaining finance.
Audit of financial statements increases the confidence of banks, creditors, and other capital suppliers in the company’s financial information and therefore increases the chances of accessing credit from the capital suppliers. To process loans, credit facilities, etc., banks may require audited accounts to access the application or to extend further facilities. The audit of a company’s financial statements can provide evidence as to whether a company is in compliance with its covenants with its creditors and lenders (banks). |
| Tenders for the procurement of goods and services | The audited accounts will be useful for both government and private tenders. Financial information obtained through audits is more credible and reliable. |
| Ensure stakeholder satisfaction | Assurance reports provide peace of mind to stakeholders such as employees, customers, suppliers, shareholders, minority shareholders, etc. As the reports are compiled by third parties (registered audit firms) stakeholders have peace of mind that the information provided to them is objective, unbiased and reliable.
This group of stakeholders will benefit from an audit. |
| Tax payments are made easy, and queries mitigated
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To facilitate the timely payment of corporate taxes, goods and services taxes, and other taxes so that interest, penalties, and investigations may be avoided. The Auditor can assist with income tax queries during a tax or regulatory investigation. As a result, additional tax inquiries will be mitigated. |
| Spin-Off Benefits | Spinoff benefits include advice from the auditors on business structure and operations, and updates on the new Financial Reporting Standards (FRS), taxation matters, and changes to the Companies Act.
Aside from tax changes, GST, account preparation, personnel tax matters, and corporate secretarial matters, audit professionals often advise on other topics as well. |
| Good Corporate Governance | A company can establish a reputation for good corporate governance and at the same time utilize an audit firm as a knowledge base |
| Assist Company bookkeeping | Although small businesses can prepare their own accounts, they often require assistance with adjustments, such as obsolete stock, depreciation, bad debt, leases, hire purchases, computation of income tax, review of accruals, provisions, and other related areas.
Companies can hire auditors at reasonable costs to assist management in preparing financial statements in accordance with the Financial Reporting Standards. An independent auditor reviews the accounts department’s work and gives management feedback. As a result, the accounts department needs to keep the accounts up to date, maintain good documentation, and prevent fraud and errors. |
An assurance report can also help businesses draw a more valid conclusion from their year-end accounts as the assurance report will highlight key areas of improvement.
An audit assurance expenditure constitutes only a small fraction of an organisation’s annual expenditure but the benefits of having it outweigh the cost as you can see from the above.
Some of the audits we conduct regularly are:
- Auditing financial statements as per the Singapore Tourism Board requirement for license renewal;
- Contractors looking to renew license with BCA;
- Companies requiring audited financial statements for project tenders;
- Grants certifications for childcare and student care centers;
- Audit for charities, and associations for COC and tax purposes;
- Audit required by MAS for licensed remittance agencies and money changers;
- Government Grants certification and others
If at any point in time you require an audit or considering changing your auditors, do reach out to us. Our team is here to help.
If you would like more information about our audit assurance services, do WhatsApp us at +65 91441840 or alternatively email us at office@scmohan.com.sg.
We can schedule an appointment over Zoom, by phone, or in person at a time that is convenient for you.
