Uses of audited financial statements

There are many uses for audited financial statements. Some of the common uses include submitting to the relevant authority, such as company commission and tax offices. These are the two stakeholders in these statements. Other stakeholders include investors, creditors of the company, and shareholders as well.

So what are the purposes of audited accounts and why do they have to be audited before they are presented or sent to relevant stakeholders? Let’s discuss some of the reasons as follows.

One of the main purposes of audited accounts is to provide a company’s financial accountability, accuracy, and credibility. This is because all entities, whether publicly or privately owned, have to prepare a complete accounting of their performance and financial position.

An unqualified audited report indicates that the financial statements prepared for a company are free of material misstatements, are correct, and are presented fairly in accordance with generally accepted accounting principles.

Another important reason to audit your accounts is that it gives interested parties, such as bankers and shareholders, an unbiased opinion regarding the credibility and accuracy of the accounts prepared by a company.

Stakeholders, especially bankers, use audited financial statements to evaluate the financial performance and position of a company for loan approval purposes. Therefore, it is always mandatory for a company to submit their audited financial statements to the banks if they need help from the banks.

Simply put, audited financial statements are used by many parties. Therefore, it is important for a company to maintain its accounting records in a proper and timely manner.