The purpose of financial auditing is to provide an opinion on whether the financial statements comply with the applicable accounting framework in their preparation, as well as to assess financial efficiency, compliance with certain laws, and to report if the figures reflect a true image of the company.
External financial auditing is conducted by an independent party external to the entity, impartial and without interests within the organization. This professional performs validation procedures on a selective basis for the documentation and records that support the amounts and disclosures in the company’s financial reports for a specific period and/or date. The result of the audit is a report certifying that the financial statements and their explanatory notes have been properly presented.
Some of the benefits for an organization that chooses to undergo an audit include:
- It measures the performance of the entity and allows for timely monitoring of financial goal achievement with efficiency.
- The financial audit helps in the prevention of financial risks or unlawful acts, potential detection of fraud and/ or errors in the preparation and presentation of financial statements and their explanatory notes.
- It enables the evaluation and, if necessary, improvement of accounting and internal control policies and procedures, in addition to ensuring compliance with the applicable accounting framework.
- It provides better control over the recording and integrity of operations, as well as potential process and resource optimization.
- Helps in compliance with legal, tax, and credit requirements of the companies.
- Establishes certainty and transparency in the use of company resources and in profit determination.
- It can enhance the quality of financial information, thereby providing reliable information for shareholders and corporate governance authorities in decision-making.
- Allows for the availability of a valid document if the company wishes to obtain financing or loans from financial institutions.
In Mexico, not all companies are required to conduct financial audits; however, an increasing number of companies choose to audit their accounts voluntarily with the aim of enhancing their image before third parties, shareholders, corporate requirements, and other interested parties, such as suppliers, bank creditors, government entities, potential investors, and the general public.
At WMP, we have expertise in financial, tax, internal control, and compliance auditing. Contact our experts, and allow us to assist your company in becoming more profitable, efficient, and compliant with best corporate practices!