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Getting Ready for a Financial Review or Audit for Your Small Business

August 24, 2016

Do you have a business loan, or are you looking for one in Denver? You may likely be required by the banking institution to produce yearly financial review or an audit done by an accounting firm. Like every tax audit done, the reason is to seek verification of what is being reported and to ensure that the information is correct. It can be quite a nerve-wracking experience when you have to get a financial review or audit done by an accounting firm. However, with a little planning, you may get through the process faster than you think, and also and be able to save some money while doing so.

The Expectation
You may not know what to expect from a financial review and financial audit. This may be the reason for your trepidation. Well, first, the staff at the accounting firm will evaluate the information that you have submitted to ensure that it is consistent and accurately completed. The staff will utilize an analytic process to make sure that the results make financial sense. If you are unable to explain the reason for change in balances, for example, the staff will do a thorough investigation to find the issue. You may also be asked to explain the change.

The Assessment
A financial review and audit are both similar in scope, but the accounting staff will still have an audit sample done. Specific transactions will be examined and supporting documentation requested. This is done so as to ensure that information is properly recorded. The staff will assess your operational procedure and the security standards used to store information. This is to ensure that data in the accounting process is authentic.

Reducing Costs

It can be expensive to have reviews and audits done, especially if your business has grown considerably. In fact, prices for audits can vary from $5,000 to $75,000, depending on the scope of the business. Reviews are half that cost. The cost is determined by the number of hours spent on correcting the financial details of your business. A good accounting firm will try to save money by assigning elementary tasks to entry-level staff. You could save thousands of dollars by making sure that your financial information is correct, thereby, reducing the time that accounting staff will spend on fixing errors.

Early Preparation
If you implemented good financial practice for your business throughout the year, then you will save time wasted on perusing through your financial documents. This is what would subsequently save you more money. You should be consistently reconciling your financial information on a frequent basis because if not, mistakes will compound and make it harder to locate the problem source. Most experts will recommend that you reconcile your bank accounts every month or every quarter. If you are going to be audited, be sure that all your profit and expenses are documented throughout the year. If you have to scramble to find documents, this could delay the audit.

Get your paperwork ready and seek the service of a Denver accountant for a financial review and audit. Contact Bloch, Rothman, and Associates, a Denver accounting firm for a free consultation. Call 303-321-7160 also if you have questions and concerns.