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What Is a Professional Audit?

For many, “audit” is virtually a four-letter word. But in some circumstances, audits aren’t to be feared – they’re to be welcomed.

We’re talking, of course, about professional audits.

We understand that little twitch that comes when you hear the word “audit.” That’s because audits from the Internal Revenue Service (IRS) can mean that you’ve somehow flubbed your taxes – and that owed taxes and fees could be right around the bend.

But professional audits are something different altogether. These are like check-ups for your business, conducted by a private-sector expert. And when done regularly, they can help ensure your company’s financial records are perpetually in top shape.

A Professional Audit: The Basics

In a professional audit, an auditor will evaluate your company’s financial statements, and then provide a detailed report of their findings.

As far as the financial statements themselves, auditors are typically concerned with two things. For one, they’re looking for the presence or absence of material misstatements, which in short is a mistake so significant that it could alter the opinion of someone making a financial decision based on those statements. They’re also looking out for whether those statements were prepared based on the proper accounting rules, be they Generally Accepted Accounting Principles (GAAP) or any other applicable standards.

That said, auditors also are usually tasked with evaluating whether a firm’s internal controls are effective. In short, internal controls are policies and procedures that set the foundation for ensuring accurate and timely financial reporting, and also protect the company from theft. Thus, auditors will shine a light on any internal controls issues.

Why Have an Audit Done?

As mentioned before, a professional audit can help prevent theft. An auditor might detect discrepancies in financial records that indicate an employee is bending or breaking certain rules to funnel funds out of the company and into their own pocket.

In other cases, what an auditor discovers might not be nefarious but nonetheless beneficial to know. They could discover innocently inaccurate financial statements, which can then be remedied. Or they might simply discover inefficiencies in the business, which you can then take measures to improve.

Tidying up these issues can help keep you on the good side of the IRS and make you look better to prospective investors and current shareholders.

How to Request a Professional Audit

You can’t just walk up to a local tax preparer and request a professional audit. You will instead need to seek out a full-service accounting/business-services firm that offers audits.

We naturally recommend you start with us – McManamon & Co. has been offering auditing services for more than four decades, so we can not only ensure a thorough assessment and evaluation, but also constant communication throughout the process to make sure your entire team is well-informed.

When it comes to your corporate financials, “close” isn’t good enough. Your records need to be handled with precision, and a professional audit can put you on the right path. Call us at 440.892.8900 or contact us online today.

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