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Unveiling the Power of Audit: A Perspective from DeFreitas & Minsky LLP
In the multifaceted, rapid-paced world of business and financial management, the term ‘audit’ arouses feelings ranging from mild apprehension to outright fear in the hearts of many. This perspective is shared not only by corporate moguls managing large companies but also by small business owners seeking to keep their enterprises afloat. Despite these shared sentiments, DeFreitas & Minsky LLP, a venerated Certified Public Accountant (CPA) in New York, stands firm on the assertion that audits offer numerous advantages—a trove of untapped benefits waiting to be discovered and utilized by businesses across the spectrum.
Understanding Audit: The Key to Unleashing Its Potential
An audit, in its most basic form, is an examination of an organization’s financial statements by an independent third party. This procedure aims to provide an objective evaluation of the statements to ensure their accuracy and verify that they reflect a truthful and fair view of the organization’s financial condition.
Now, how exactly does an audit benefit an organization?
Enhancing Accountability: The Most Evident Audit Benefit
Audits are widely recognized as a cornerstone of accountability. Every stakeholder, from investors and creditors to employees and suppliers, relies on an organization’s financial reports. These reports should therefore be accurate, transparent, and reliable, hence bolstering stakeholders’ confidence in the organization’s financial management.
Based on a 2018 report by the Association of Chartered Certified Accountants (ACCA), audited companies witnessed a 50% decrease in fraud occurrences compared to their non-audited counterparts. Source
Bolster Investment Appeal with Audit
In addition to enhancing accountability, audits also increase a firm’s attractiveness to current and prospective investors. Audits act as reassurance of financial credibility, providing investors with the certainty and confidence they need to invest.
A study by the American Economic Review found that well-audited, transparent firms attract more investors, thereby boosting their capacity to grow and expand. Source
Audit as a Profit Protection Shield
Audit benefits extend beyond enhancing transparency and accountability—they also protect profits. With fraud and embezzlement arguably posing significant threats to an organization’s financial integrity, audits serve as a shield, safeguarding utmost profitability. Auditor vigilance ensures early detection of financial discrepancies, allowing companies to retain their hard-earned profits.
Research by the Association of Certified Fraud Examiners(ACFE) showed that businesses with regular audits reported 54% less business income losses, primarily due to early fraud detection. Source
Audit for Operational Efficiency
Audits also offer the advantage of increased operational efficiency. The process of auditing involves a thorough review of an organization’s systems and operations, providing insights into areas that may be experiencing inefficiency or wastage. Advice given by auditors can then be instrumental in streamlining operations, boosting productivity, and increasing profitability.
Steering Compliance: A Less Talked about Audit Benefit
In the current business environment where a mishmash of complex laws, regulations, and standards exist, non-compliance can be akin to plunging into a minefield of heavy fines, penalties, and damaged reputation. But worry not, regular audits can steer your organization towards sustained compliance, acting as a buffer against potential legal and regulatory backlash.
A 2019 Compliance Week report highlighted that compliant organizations were 50% less likely to be served regulatory fines or penalties. Source
Increasing Market Confidence
Lastly, an audited financial statement enhances public and market confidence, contributing to the reputation and prestige of the organization-a vital lifeline in today’s highly competitive market contexts.
The Audit Advantage extends beyond the typical assurances of financial accuracy – it’s a facilitator of accountability, a protector of profits, a boost for operational efficiency, a guide towards compliance, an attractor of investment, and a signal of public trust.
Entrusting Your Audit with DeFreitas & Minsky LLP
Embracing the advantages of audits starts with selecting a competent and experienced audit firm. With years of experience in delivering tailored audit services that unlock added value for our clients, DeFreitas & Minsky LLP is poised to transform your approach to audits.
Our dedication to dispelling misconceptions surrounding audits and highlighting their many benefits is echoed in every service we offer and every interaction we cultivate. With our expertise, we will not only conduct a meticulous audit of your financial statements but also guide you on how to leverage the insights gained for the betterment of your business.
The Audit Advantage is but a call away- reach out, and let DeFreitas & Minsky LLP guide you on the journey to discovering the power of audit.
