The Benefits of Auditing for SME's
Even if soon it’ll become “mandatory” for many companies, it has significant advantages
What is the Audit
The term “Audit” refers to the activity carried out by qualified Professionals (Chartered Accountants or Accounting Experts of the Register of Statutory Auditors), who, through the application of “sample check”, allows them to verify the truthfulness and correctness of a Company’s Financial Statements or Consolidated Financial Statements.
The Peculiarities of Auditing
The Audit is aimed at the “judgment” by the Statutory Auditors on the “reliability and truthfulness of the information represented in the Financial Statements”, a document that is thus “certified” to third parties with the Auditor’s Report which, pursuant to Legislative Decree no. 32/2007, must contain the following information:
- a) an introductory paragraph identifying the annual or consolidated accounts audited […];
- b) a description of the scope of the statutory audit carried out with an indication of the auditing standards observed;
- c) an opinion on the financial statements which indicates whether it complies with the rules governing its preparation and whether it represents the financial, equity and the economic result for the year in a truthful and correct manner;
- d) any information elements (not findings) that the auditor submits to the attention of the financial statements;
- e) an opinion on the consistency of the management report with the financial statements.
In the event that the auditor expresses an opinion on the financial statements with qualifications, a negative opinion or issues a declaration that it is impossible to express an opinion, the report analytically illustrates those reasons.
The Benefits of Auditing for SMEs
The Audit has considerable advantages for SMEs who have decided to adopt it because, in addition to having a “Certified Balance Sheet” for the Stakeholders (shareholders, banks, customers, suppliers), it allows to keep under control the Company Management and the Liquidity, acting promptly to avoid the Business Crisis.
In addition, the Accounting Audit integrates perfectly with the Internal Management Control, where existing, as the latter provides, through periodic Reports, useful information for “random” accounting checks.
The D.L. n. 34/2020 (so-called “Relaunch Decree”) postponed the obligation to appoint the Auditor to 2022 for S.r.l. o Cooperatives that have exceeded at least one of the following size limits for two consecutive years:
- Total Assets in the Balance Sheet: equal to 4 million euros;
- Revenues from Sales and Services: equal to 4 million euros;
- Employees employed on average during the year: equal to 20 units.