Should I have my Accounts Audited.
by Colin Linke on 09/03/10 at 6:23 am
I met a new client yesterday. They are a small business importing items and retailing them through a retail outlet – and very successfully as well.
Once of the questions that was asked was – should I have my accounts audited?
It is a question that I am often asked, and in most cases I say yes. Whether Bentley are doing the work or someone else an audit is a very good step in ensuring that the accounts are being prepared correctly and also ensure that things are not being “swept under the carpet”.
My Melbourne based client is not a service business, i.e. a lawyer or real estate agent, and thus relies on the work of others to get their products sold and also to get their accounts prepared. They do not know what is the correct accounting procedure for an transaction and rely on the financial controlling skills of their accountant to ensure it is all treated correctly.
But who is checking the accountant?
In reality no-one is. You have to have total faith that the advice that you get is correct. Now what would you do if your doctor said that the cough that you have had for the last 7 months is nothing to worry about. You would try his remedies but eventually you may – and more often than not will – consult a second doctor to confirm the diagnosis.
An audit is the exact same procedure. I encourage my clients to get an audit because it ensures that they are happy with the way things are happening and provides support for the work that we do. A review will cost you a very little – maybe $1000 to $1500 and the peace of mind gained is worth fair more than that. You don’t need them every year, in fact I encourage my clients to get them whenever they feel like it. On average every 2 to 3 years meets their needs.
I am confident in our systems and accounting treatment of transactions that I have no fear in the audit process. I encourage it because the piece of mind provided ensures a better outcome for everyone. In my experience however there are others out there who fear the process. beware of these people!
