Audit has always been misunderstood as being a bad thing, many business man perceive it as being a link to suspicion of stealing or not telling the truth. Of course, this is not true audit has numerous purposes besides this one in the financial environment. You can use audit to predict what your financial situation is going to look like over a couple of years and advice you on what you can change to get better results. The person analyzing your business financial can make suggestions on how you can change your financial plan is the situation asks or it can correct any mistakes which are present in it.

  • Expectations: One of the things an auditor does when he comes to you company is form some expectations. These expectation are all linked to the future of your business. At the end of this analysis the audit will be able to tell you how much money you are going to gain in the next couple of years, if your business will be able to remain on the market and also if the risk of investment is worth it for your business.
  • Finding problems: There are two main types of analysis which an auditor can use: the trend analysis and the model based analysis. We are going to present to you briefly the trend model because it is the weakest type. What the auditor does is compare the amount on money a company received with the trends of the industry present in the last couple of years. This analysis is not the best option for a financial analysis because it only takes into account a small part of the financial information given by any company. The model based analysis is most used by auditor when doing a financial analysis to find problems. What they do is compare how much money the company took in with what the company is expected to take in according to the operating activities. The auditor will immediately start to look for mistakes if the company has data saying that they took in too much or not enough money. A business model may be based on many different aspects.
  • Making a plan: Auditor are very useful when you want to make a financial plan. Because they can analyze your financial information the can come up with the best suggestion for your plan. They can predict if a business is going to have problems in the future and thus suggest ways on how you can change your situation.

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