Business audit

 

Audit is an independent examination of accounting and financial records for reliability and consistency of the accounting procedures with applicable laws. When purchasing the company with cumbersome accounting, a large number of counterparties and transactions, a cursory examination of the accounting and management reports does not allowing making the right decision about buying a ready-made business. The absence of such information, the possible distortion of accounting data misleads the buyer. Moreover, there is a risk that the audited company's financial schemes do not comply with the legislation; and the new owner, in case if he continues to use them after buying the business, runs the risk of incurring the administrative or criminal responsibility. In such a situation, carrying out an independent voluntary audit, initiated by the buyer, allows obtaining real picture of what is happening in the financial service of the company, identify weaknesses, and develop effective measures to prevent mistakes in the future. Buying a ready-made business without the prior audit can save money on auditing services, but can adversely affect the budget in the future.

It is often the case that the outwardly respectable announcement hides a problem business that has a bad reputation due to various reasons. These reasons include conflictness of the previous leader, constant litigations, the level of service that frightens off customers, abuse of a dominant market position, conflict with executive or supervisory authorities, criminal cases related to the business, bad press notices, and negative attitude towards the company on the part of the local population. Continuing such business after the change of ownership may be extremely difficult since the previous problems can affect the performance of the business in the future.

 

Buying a business is not only the payment of necessary sum of money, but also a number of legal procedures that should be performed flawlessly, in compliance with all orders and regulations prescribed by law.