The Importance of Audits to Manage Finances
Published: 18 Jul 2013
The vast majority of organisations are legally-obliged to publish audited accounts on an annual basis. This enables companies to show their transparency and that they have been working in a legal manner. Audited accounts are not just of interest to government authorities but to various other parties too, including people like shareholders and potential investors. Audits are generally carried out by independent and unbiased teams that have no vested interests in the plight of the companies that they carry out the work for, and their activities can be of benefit to many people.
Help From Tax Accountants in London
Investors and shareholders aren’t usually involved in the day-to-day running of a company, but have an obvious interest in seeing the financial activities of a company laid out in front of them in a clear and transparent way. This can help them to assess how successful their investments have become and whether they approve of the way that their money is being spent, as well as how the company's accounts are being handled. Chartered accountants in London and financial directors meanwhile are more involved in the running of a company, but require the results of impartial and independent auditing in order to assess how effective their own financial work has been. Audits might be uncomfortable for those that have been in charge of a company’s finances, but they can enable them to work with the numbers more confidently and efficiently in future.
True and Fair Auditing
External Auditors perform their duties primarily with investors and shareholders in mind rather than company directors. Without audits, shareholders, investors and authorities have no real way of assessing how well a company is performing regarding its accounts. This could send shockwaves of uncertainty through a company and reduce the chances of further investment being made – not to mention the fact that it is usually illegal not to put auditing in place. The main purpose of an audit is to ensure that the financial information that a company puts through is accurate, fair and true.
Nurturing Confidence in Business Activities
Auditors target a ‘true and fair’ portrayal of a company’s finances rather than a 100% accurate one as the latter would require them to investigate every last transaction to the letter. This can be impractical and even impossible, but highest realistic standards of transparency and clarity are aimed for nonetheless. Today’s auditors also look at the efficiency of the systems that companies use to report and authorise their transactions too, to ensure that full compliance is apparent. Company directors, tax advisors and accountancy firms in London place a strong reliance on the expertise and experience of auditors, and generally believe that their advice and assistance can contribute to making a company’s financial health more robust. They can help companies to stick to complex rules and regulations and can also enable a company to put more effective and coherent planning strategies in place. It’s hard to overestimate the role that auditors play.
Redford & Co are a firm of London based chartered accountants and tax advisors providing a first class service tailored to suit the clients needs. Visit the Redford & Co website for more information on chartered accountants in London.