Understanding the Importance of Statutory Audit
As much as statutory auditing is considered mandatory for companies incorporated in Singapore by audit firm in Singapore that meet a set of criteria, the result of auditing is equally beneficial to the company involved in the process. Due to the prevailing audit exemption thresholds in Singapore, companies that are defined as small are not supposed to engage in the statutory audit. However, it’s important to note that engaging in auditing even if its internal auditing can be beneficial to a company.
The process of auditing helps in providing a company with relevant feedback on how effective the company’s internal controls and processes are. Through auditing, those involved in managing the company also get access to a useful perspective and insight that can be beneficial for running the company. The effectiveness of the feedback and insight that you get from the auditors is highly dependent on the type of audit firm in Singapore that you choose to work on your records.
A statutory audit helps with determining whether an organization is actually providing a true and fair view of its financial performance and position or not. The audited report can then help organizations towards making the necessary financial decisions regarding how the company should operate. The process under which statutory audit is undertaken helps with challenging the robustness of the internal control systems and the processes that are put in place within the organization.
Here are some of the reasons why statutory auditing is important;
Improves Internal Systems
When you engage a reputable audit firm in Singapore, you can be assured that they not only focus on the numbers but also take time to understand the overall systems and controls that exist within the organization for better analysis and reporting. It’s through such that they get to identify the deficiencies that exist within the accounting process, and recommendations can then be made that helps with making the company more efficient and less prone to error and fraud. Through engagement in auditing, companies get to improve their internal control systems and processes.
Getting your financial statements verified by a reputable audit firm in Singapore has a way of enhancing the company’s credibility before various stakeholders and even financiers. If in case a company opt to dispose of some of their shares or raise some finance, provision of audited financial reports helps with providing the much-needed credibility that your business is free of any malpractice or error. It then becomes possible for the organization to realize the desired business goals. Working with a reputable auditing firm is therefore vital for any organization considering engaging in a statutory audit.
Boosts Shareholders Confidence
Majority of businesses operate with a limited number of directors that operate the company on behalf of shareholders. Some of the shareholders are even based in different countries which makes it difficult for them to operate in the day to day business operations. By engaging a statutory auditor in Singapore for an independent view of the financial records, the shareholders are capable of getting insight on the financial position of the company, and that helps them ascertain whether the company is operated within their business interests.