A company’s success is directly proportional to how well its finances are managed. Beyond possibilities of failing to turn a profit, refusing to meet certain financial requirements as stipulated by South African law is a sure-fire way of putting one’s company under the keen scrutiny of regulating bodies. Furthermore, more severe consequences of non-compliance to financial legislation may include hefty fines and operation closures.
Because of the immense risks associated with poor financial management, it is essential that business owners seek out the most effective and efficient methods of administering proper financial management. One of the most popular ways of doing so is sourcing third-party assistance, and in this article, we will discuss the role of an external auditor and propose an argument for why you should seek the services of one.
What is External Auditing
An audit refers to the examination of a company’s financial statements and other financial information. A South African financial audit is done in accordance with prescribed auditing standards as outlined in the Auditing Profession Act No. 26 of 2005.
Auditing is a process whereby financial statements are assessed with the purpose of providing an opinion on their fairness as well as compliance with proper reporting systems. Furthermore, other financial information is prepared, according to stipulated criteria, with the intention of advising on said information. External auditing refers to the independent contraction of an accountant or accounting service to facilitate the objective examination of these financial records.
External auditors are contracted to assess the accuracy of a company’s financial statements and records. They are responsible for examining all financial operations and provide guidance on how a company can legally align their finances to comply with all relevant legislation.
External auditors are tasked with finding discrepancies across all reports, whether being contracted since a company’s formation or brought in for consultation purposes during a business year.
The Difference between Internal and External Auditing
Internal and external auditing, although serving the same purpose, are very different approaches to accounting that offer distinct benefits and disadvantages. We already understand that external auditing refers to the assistance of third-party accountants to analyse financial statements. Internal auditing, on the other hand, refers to the process of financial examination conducted by a group of accountants employed by the company that they are examining. The problem with this type of auditing is that auditors cannot be completely objective as they have a stake in the company’s success.
Furthermore, internal auditors may breeze over financial reports and miss small problems as they have larger roles and responsibilities within the business. There are benefits to having an internal auditing team. After all, they will know the ins and outs of your business operations. Alas, there are too many points in favour of hiring an external auditor that we will discuss below.
Why Choose an External Auditor?
As external auditors provide a more objective opinion than internal auditors, companies receive the benefit of unbiased accounting services. This ensures that reports are as accurate as possible and potential mismanagement is minimized. This benefit also includes the fact that external auditing boosts a businesses credibility. External auditors are responsible for locating minor financial problems, which allows them to find management solutions before major issues find their way into a company’s finances. This reduces the risk potential of non-compliance with legislation. External auditors can also offer an array of beneficial advice, from ways to reduce waste to methods of improving efficiency.
MBS offers extensive accounting services and our Registered Auditors are equipped with the skills needed to provide superior auditing solutions for your company. Whether you wish to have a consultation or get the auditing ball rolling, this expertise will help guide professional financial management for your business.
External auditing involves the assistance of third-party accountants responsible for assessing a company’s financial statements and information to provide guidance on compliance as well as methods for improving profit returns. Sourcing an external auditor is beneficial as they provide an objective and unbiased opinion, helping businesses achieve credibility and transparency that supports their stance in the eyes of legal bodies. There is a lot to be said about the benefits of external auditing and you may enjoy these perks with MBS.
I'm very happy with the Company Registration services that MBS offered us recently. I highly recommend MBS. Not only were they fast and efficient but also very professional and kept me constantly updated with progress of the many registrations that they did.
Claudette Shepherd A Year Ago
MBS accounting service offered my husband and me excellent service and come highly recommended. They assisted us with de-registration from SARS and made a complicated process, due to the fact that we weren't in SA anymore, smooth and easy. They followed up and were very accommodating with every step of the process. Great value for money.
Senzo Xulu A Year Ago
Super proffessional team. They give you guided support, which ensures that you choose the appropriate level of services for your business. From a distance you pick that they are a systems driven with attention to details. Special thanks to Dylon.
Selected Studios A Year Ago
Brilliant services and Effects to help my business out ☝️
reece stander A Year Ago
Dylon from MBS had offered me a list of incredible services and I couldn’t help but do my registration of my business through them due to there lighting fast services, informative employees as well as just helping in any convenient way possible
Vida Pretorius A Year Ago
Thank you Dylon so much for the quick and efficient service we received,
Steve Quirk A Year Ago
Fantastic!I would personally like to thank Dylon for helping me register my company and being so professional about it. Not only was he professional but he was definitely fast.As soon as you enter the webpage you get a message from him letting you know that he is there to help. He responded to my message within minutes and I was on the right track .Dylon keep up the hard work and I will look forward to using MBS services for all my business needs .
EE Marketing 5 Months Ago
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Thank you to MBS Accounting Services for assisting with my company registration. They made - what seemed like a daunting task - a streamlined, convenient and pleasant adventure. A big thanks to Dylon who offered friendly, punctual and efficient service throughout.