In today’s competitive business environment, rigorous planning and strategic needs to be applied to all possible domains to sustain in the competitive market. One of the core pillars that depicts the complete scenario of business is accounting, which is regarded as the language of business. Any business entity irrespective of the size and nature needs to compute accounting transactions as it records the outflow and inflow of cash. Being a business investor or owner, it is essential for you to understand that recording business transactions will help you to track the business growth. However, there are numerous ways to refine these recordings, and one such way to get ahead with is an audit. This guide will help you to understand how to improve accounting and generate revenue backed by audit.
A Gist About Audit
The concept of audit revolves around the word “scrutiny.” The whole idea behind the implementation of the audit process is to understand whether the business activities are carried out legally or illegally. Under the umbrella of audit, there exist two types, namely: Internal Audit and External Audit. Both the process aims at improving the overall structure of a business entity covering the internal as well as the external business scenario. Since we are here to understand the impact on the Accounting domain, let’s assume it with the help of different situations.
Scenario 1: Pre-Audit Process
Imagine a scenario where you have not infused the concept of audit in your company. Here, the ideal situation is that you end up dealing with numerous business transactions which get recorded accordingly. Now, there exist a probability of loopholes present in your business books, and you are not aware of it. This would ultimately end up portraying incorrect numbers that would affect the ultimate records like balance sheet, profit and loss statement etc. Even, your future business planning might turn out to be a game-changer and lead your business towards loss as it is built on the roots of false figures. Even if the projections aren’t made at the initial stage, delaying the audit process will hamper your business growth at a later stage and might also lead to a company liquidation, an ultimate end.
