Business audits don’t have to be a scary process performed by the government or a regulatory authority.  Now more than ever, businesses from restaurants to doctors to dentists and more are voluntarily submitting their records to an accountant for preventative purposes.  A financial audit of your small, medium or large scale business in any industry by a qualified Certified Public Accountant (CPA) is a very useful planning and prevention tool.  At AberCPA in the New York, New Jersey and Connecticut areas, we understand the enormous benefit you can gain from a comprehensive understanding of your financial position and we are here to assist you in your business audit process.  

Most businesses are the business of making a profit and being able to realize and keep that profit.  Securing that profit and a financial future for your business are not that simple.  AberCPA wants to keep money in the hands of your business.  Take a look at what we view as some important aspects of business audits:

• Benefits of  Business Audits

• Types of Business Audits

• Types of Business Audit Opinions

Benefits of Business Audits

Your CPA audit or review will take an in-depth look at your business’ financial position and highlight areas where you are in good standing and areas where improvement is needed.  The business audit will help your management make better decisions so your business is a genuine contender in its industry and that you are headed in the right direction.  Identified areas of improvement and their subsequent remedies will ensure that your products and services are generating the maximum profit while strengthening the overall robustness of your business model.  Just a few of the many benefits to be garnered by a CPA business audit are:   

• Confidence in the figures submitted to regulatory authorities– your need to worry about the back-up for your business’ tax filings and accordance with other applicable laws is appeased.

• Avoidance of future IRS audits or tax penalties– shedding some light on business financials inadequacies prior to the point where it raises a red flag will greatly help to avoid future IRS audits or tax penalties.

• Increased chances of securing financing– be ahead of the game and have your audit done before it is requested by a lender when you want or need business financing.

• Decreased rates on financing– studies have shown that some businesses are rewarded with an interest rate close to 1.0% lower than competitors if they have an already existing financial audit.

• Insight into “the books”– to an accountant or financial professional, the numbers need to tell a story; an audit or review will help you understand the meaning of the numbers backing up your business.

Types of Financial Business Audits

To prepare for business growth and assume less risk, the business audit will help you stand out from the crowd.  A recent study conducted by the Federal Reserve Board’s National Survey of Small Business Finances emphasizes that there are fewer than “one quarter of businesses with fewer than 500 employees who keep financial statements of any kind.”  Businesses with no audits on record are just not held in the same esteem as those with audits performed by a CPA.  With that said, you have several types of audits to choose from for your business:

The Full Statutory Audit

The first and foremost requirement for this type of audit is that is must be completed by a licensed CPA.  Your full statutory audit will attest to your business’ full compliance with all federal, state and local governing body statutes.  The review you receive will be extremely thorough and performed on essentially all of your business’ financial data.    

Attestation

Consider the attestation to be a mini-statutory audit whereby all your business’ financial data is thoroughly reviewed but not in the same amount of detail.  

Non-Statutory Audit or Financial Statement Review

The non-statutory audit or the business financial statement review differ from the above two audit types in that they focus on a segment of your business or compliance with only certain statutes.  Also, this type of audit is not always financially driven and focuses on adherence to other types of laws outside of the financial spectrum.  For example, if you are a restaurant owner, you may want to conduct an audit with a CPA to ensure your compliance with Department of Labor regulations that govern the way your staff is being accounted for or treated.  This type of audit is another way to limit liability.  

Types of Financial Business Audit Opinions

The final step in the business audit or review process is when your auditor, in this case your CPA, gives what the accounting community calls an opinion.  The opinion basically certifies or does not certify the data and conclusions contained in your business’ audit.  There are several different types of opinions.

Unqualified Opinion

This is definitely the opinion you want to get although the title is deceiving.  In short, the unqualified opinion is essentially a complete stamp of approval and means that your CPA is reporting that all materials needed to complete the audit were entirely provided and sufficient.  The big piece here is that your business was found to be in total compliance with Generally Accepted Accounting Principles (GAAP).

Qualified Opinion

The qualified opinion is one step down from the unqualified opinion albeit still an acceptable audit.  This opinion means that your auditor or CPA found some specific discrepancies in your report or review with GAAP; it could also mean that your auditor did not receive some materials that he or she may have found helpful to the audit process.    

Adverse Opinion

This is not the opinion you want to get on your audit.  This type of opinion is basically saying that your audit shows negligence on the part of your business and you are not in compliance with GAAP; your financial statements fail to portray an accurate picture of your business’ cash flow, operational configuration or overall financial position.   

Disclaimer of Opinion

The disclaimer of opinion is exactly what it says it is- a statement that says the auditor or CPA cannot give an opinion because of incomplete data or documentation.  

Conclusion

Grow your business and be able to sleep worry free by having a financial business audit conducted.  AberCPA will complete the otherwise grueling audit review process for you and help your business avoid future complications.  As your full service accountants, we can help you with audits, tax filing and preparation along with financial planning.  Contact us at (845) 215-5969 or complete our contact form and we will guide you through these processes.