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Since inception FRC has made sure that the best practices related to financial reporting are preserved. The resident as well as the nonresident companies makes sure that they always consult FRC before any type of decision related to financial reporting is undertaken or implemented. The expert advice of FRC I like a boon to the companies which makes sure that the best interest of financial reporting is not only maintained with audit reports but the interest of the company is also preserved. According to the scope of the work there are several advantages of FRC out of which some are listed below:
Audit reports have a huge impact on the financial future of the business as they provide a clear view to the management and the stake holders about the short comings within the financial structure of the business. The Audit reports also ensure that the company’s financial forecast is also highlighted so that the stakeholders make their minds clear to continue their business with the company. The importance of the Audit reports can be judged by the fact that the coming year’s financial and investment management solely depends upon this financial document and very important decisions are taken by the management to boost the confidence of the investors and stakeholders. The Audit reports should be written in a detailed and professional manner so that the related people can get a clear idea of what the future of the business would be. The Audit reports are legal documentation of the financial health of the company and if it has been formulated by the internal auditor then the external auditors make sure that the validity of the internal auditor’s credibility is also measured based upon this piece of evidence. Unfortunately the business owners in this world of advance trade and rapid growth are not free to take a close look at the audit while it is being performed at the year end and they leave it to the financial department which not only hampers their business but also leads them towards failure. It is therefore advised to make sure that the owners should take personal interest in making of the audit report and should suspend all other activities even business related. The best Audit reports should make sure that following sections are included to make audit report as one of the best year end documents.
It is very important to note that the corrective actions are mentioned within the audit report so that the business could get the direction and can perform according to the needs and demands of the Audit reports. A quality audit report is the one that containsall such factors in light of evidence and the auditors have made sure that the corrective actions are also embedded with their own view point so that their prowess is also shown in this regard. The report should be written keeping in view the objective of audit and the related outcome as these are the only points which make it the best financial document.
The report should mention the issues that have been identified to make sure that the corrective related departments are made aware of the shortcomings within the financial structure of the business. Again the issues that have been identified in this regard must be supported by evidence and should be presented in a well defined format so that the company can follow them with ease and satisfaction.
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