Importance of an Audit System to Companies
Auditing is an exercise that’s undertaken by companies as a means of evaluating the effectiveness of the company’s internal controls. Having an effective internal control system is important if an organization is to realize its business objectives, have reliable financial reporting on its operations, and also be able to prevent misappropriation and fraud of its assets with the intention of minimizing its cost of capital. For an effective audit to be undertaken in Singapore a company should consider engaging a reputable audit firm in Singapore for such tasks.
Here are some of the reasons of having an audit system within a company;
Enhances the Realization of Business Objectives
Working with a reputable auditor in Singapore that can put in place an effective audit system within a company enables a company to pursue and also attain its various corporate objectives. Business processes require some system of internal control to help facilitate supervision and monitoring of the business processes. An audit system will help in ensuring the detection and prevention of irregular transactions, measurement of ongoing performance, and also maintenance of adequate business records that promote operational productivity.
Internal auditors in Singapore helps with reviewing the design of internal controls and in turn informally propose improvements. They also document any identified irregularities and reports to the management for further investigation.
Assess the Risk Misstatement
Having an audit system in place makes it possible for the audit firm in Singapore that’s involved in the task to assess the risk of material misstatement in the company’s financial records. When a system of internal control is lacking, a company may not be able to create financial reports that are reliable for both internal and external use. The company may not be able to identify which of its segments or the product lines are performing well and the ones not doing well.
With the help of a reputable audit firm in Singapore such as Onestop CA; a company can be able to create audit systems in place that helps in ensuring that the internal controls are effective and the financial records reflect the true picture of the business operations. A company can then be able to effectively manage its affairs as it’s capable of clearly identifying the status of its assets and liabilities. An audit system is crucial for a company as it helps with the prevention of misstatements in the company’s financial records.
Detection and Prevention of Fraud
Working with a reputable auditor in Singapore who not only understands the accounting principles but is also well versed in auditing can be of great benefit to a company. Occurrence of fraud and error within the business can have such a huge impact on the credibility of a company’s financial records. Having an audit system helps with ensuring that rigorous systems of internal controls are put in place to help in detection and prevention of fraud.
Audit professionals assist with the design and the modification of internal control systems and working with an auditor in Singapore who understands the dynamics of the tasks involved is important. A company that’s known to have a diligent audit system in place is likely to enjoy a good reputation and that alone has the potential of halting any attempts of fraud within the organization.
Originally published by onestop-audit.com