The organizations financial statements are the final report card after a certain period (mostly twelve months). Your bank or other third parties will evaluate this highly important document, to reach certain conclusions about your business.
Weak preparation and negligence can cost business substantial sums, if that loan is turned down. Consult expert accountants, when reports are required. Rather pay higher fees, than to settle for a cheap accountant. Cheap accountants, produce poor financial reports.
Clients should request an inspection of their working files, before taking delivery of their reports. The accountant remains the owner of the working file, but should share all his findings with his client. Do not enlist accountants who fail to back up their assignments with professionally prepared working documents. It is in your own best interest to verify this fact!
Please note that working files are not client admin/permanent files. The working file will contain the relevant information (working papers) used, to construct the financial statements. The working file connects all the voluminous data in the books of account with the final draft.
Any accountant worth his salt will follow these procedures below, to prepare working papers (building blocks):
This is a very simplified guideline, and more extensive working papers could be prepared. Inaccurate reports can be disastrous. Business owners should equip themselves with a basic knowledge of financial statement preparation. If multinational corporations accountants could get away with fraudulent financial statements (until they were caught out), due to stockholder apathy, imagine how serious this situation could be for, small business owners.
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