Unaudited financial statement are usually not subjected to any independent verification review processes. Financial statements in this case often remain unaudited until scrutinized by a certified external auditor, for the annual mandatory presentation of financial reports required under the law. However even with this and the task of unaudited financial report statements resting on the business, many business owners still wonder if it is better to hire a profession firm to do the compilation of unaudited financial statements or do it themselves.
When it comes to undertaking unaudited financial statements, a lot of time has to be put aside from the business to do the compilation process correctly in a short time. In this regard time used up which is taken up from more important things in daily running of the business occurs. However with the use of a professional firm businesses can be able to focus more on clients and other issues, as their business financial statements are being taken care of.
The reason behind the legal requirement of business presenting their audited financial statements every financial year is/was fraud. With businesses reporting lower incomes and assets while overstretching truth in liabilities, governments lacked the tax needed. In this case same principle applies when it comes to handling of unaudited financial reports. This is for the simple reason that in case of unethical behaviours occurring in the business, fraud can be detected early when and if a professions firm is used and appropriate personnel notified. In addition to that misuse of funds will also be detected in a few isolated cases, within the business that need stream lining. On the other hand by undertaking the unaudited financial statements reports within the business, detection might be missed until the audited financial statements are carried out. This comes about as the once in charge may be the culprits involved in the embezzlement process.
Up to date better running of business
Businesses often legality often changes with introduction of new trends, and working in a highly volatile market that keeps on changing. With the fast paced environment tax accounting and legal issues change, with the same needing to be reflected in the business. In this regard by having professional firms undertake the task, the business can be able to stay on top of the current issues taking place. This on the long run ensure that there is smooth and overall better running of the business.
Financial position for new investments
In most businesses which do unaudited financial statements on their own, the likelihood of finding figures that do not add up and work full of errors is usually high. In this case when it comes to acquiring new investments either in product line or a new building in the near future, chances of getting the needed funding from investors and banks is low. This arises as past audited financial statements will not be enough, especially if the year has progressed on and current records are lacking. With the unaudited financial quarterly financial statements as proof not only does the business show seriousness of expansion and undertaking new business, but is also seen as a written plan proof instead of blank sheets to work with.
With investors coming in and time for the mandatory audit reports has not been done yet, unaudited reports aid to keep investors interested in the business. This would be highly unlikely in the event that investors look up the financial statements, finding multiple errors and figures not adding up. In this regard with stakeholders of the business waiting on the audited reports, the professionally done unaudited statements show a positive image. Creditors and suppliers also get to trust the business more with the professionalism presented.
When it comes to businesses, each manage their financial information in different manners that will be most beneficial. However there are times the need for the unaudited financial statements arise in urgent cases, for quick decision making processes. This may become difficult if they are not completed. With profession firm’s availability, producing reports becomes easier even with constraint of time, as that is the only thing they are working on unlike the business which has its operations to consider.
Truth is when it comes to getting professional firms to undertake the compilation of unaudited financial statements, spending money on the process is a must. In this case many business in the end choosing doing the reports within the business. However by doing it professionally the first time the high cost of the yearly audit becomes less costly. This arises as with the unaudited financial statements for the quarters compiled before can be easily used as a guide. Limiting time of the external auditor in the business, thus cutting out additional expenses.
No errors/ fast reporting
With the aim of getting accurate and detailed information on the audited financial statements with the help of unaudited reports at the end of the business year, use of profession firms helps give the accuracy needed. This way classification and analysis of the business can be done with ease at end of business year. This is different when doing the audit once a year, as a lot of time is taken to go through the records. As if that is not enough information may not be accurate as it becomes extremely tiring to work on the loads of information. However by hiring a profession firm for the unaudited financial statements reporting standards are raised, as no errors and thorough checking of records is done by use of the income statements and balance sheets for the accounting periods. In the end vital information about the business is highlighted as there is no chance of missing anything.
Still if the size of business is small and in the event the business is not required to produce mandatory audited financial statements, only then can professionals firms be overlooked. However with the only advantage of doing unaudited financial statements within the business saving on money, using profession firm’s for the work is advisable. In the end not only will detection of fraud, proof of expertise be given to investors and legality maintained, but also saving money will still be achieved when negatives found with the audits are eradicated.