Publicly traded companies are used to undergoing financial audits — it’s a requirement for most of them – but privately held companies can generally keep their finances private. However, lenders and some insurance companies may require you to have an audit performed. And, in any event, an audit can help owners pinpoint problem areas and identify solutions that can improve their company’s prospects.
A COMPLETE ANALYSIS
One advantage of conducting a private company audit is the depth of findings such an exercise can identify. While a financial audit won’t identify or offer an opinion on every internal control process, it may uncover vulnerabilities to embezzlement or significant errors in financial reporting.
If expansion plans require a cash infusion or complex insurance arrangements are on the horizon, your company will likely need to show an audited financial statement. The statement should follow standards specified in the Financial Reporting Framework for Small- and Medium-Sized Entities, issued by the American Institute of CPAs (AICPA).
This framework provides a detailed approach to providing the information stakeholders may require and can help you run your company better. Talk to an accounting professional to learn more.