Friday, July 16, 2010

Audited Financial Statements and the Benefits And Drawbacks

If you are considering getting a set of audited financial statements for a particular purpose but on are on the fence this is for you. Fine, let us get started. On one side you have the "Pro", the positions in favor: The very first point in support of audited financial statements is going to be they will be respected more than a review or compilation. A 2nd point in favor would be they are required for many regulatory authorities. The 3rd supporting point is going to be they are the best and highest form of assurance. The 4th point in support of audited financial statements will be that it may be the only way you can get a buyer to consider purchasing your business. Lastly, the 5th point is why start with a review or compilation and later have to upgrade. For balance then let's hear from the other side, those opposed, the "Con" side: The primary point against audited financial statements is the higher cost than reviews or compilations. The 2nd point against will be the time it may take to get it done. A 3rd significant point against is you will need to use a CPA to produce them. Your fourth point against is the expense may never pay off. And 5th and last, but not necessarily the least, consideration against is perhaps you do not want to open up your books to an outsider.

So there we have all the arguments for each side.

Finally then, what is the "bottom line" here? Are audited financial statements good or bad?

We now have a "Yes" answer to both questions! audited financial statements definitely seems to be both good AND bad! It is left up to your reader to determine which side, the good or the bad, outweighs the other...