Question

"Auditing is an expensive but essential function for both for-profit and nonprofit organizations, for different reasons. What exactly are the benefits the organization gains from those expenditures, and how are they measured? How can audits help in establishing strategic, marketing, and internal consulting expenditure goals?”

Answer 1

Auditing is an independent examination of the financial records, to know the true and fair value of the financial statements.

Even if it is highly expensive, which will helpful for both entity send government as well.

Benefits of conducting an audit as stated below;

@for the non profit organizations:

-generally federal office of management and budget(OMB) requires an audit if their spendings exceeds$500,000 in federal funds.

Coming to the benefits

#prove your finances

By way of testing an accuracy of accounting records and internal controls,

#To maintain tax exempt status

Charitable organizations organised under section 501(3) of the internal revenue code,

Audit may be beneficial in determining if the NPO has expenses finds in activities not allowed.

#to assure your contributions

Which gives assurance regarding funds are being managed properly.

@benefits to a profit organizations

-compliance

#to meet the statutory requirements and regulations in the industry

#audit provides complete peace of mind for business owners and shareholders that the Oregonian us 100% compliant with all of its current statutory obligations.

- business improvements/system improvement

#in depth audit takes an organisation's internal control system with impartial look.

#suggesting improvements regarding efficiency, business systems, accounting practices.

-credibility

#an auditing provide independent physical verification that the financial statements are a true and fair representation of the entities current situation, which provides invaluable credibility to the clients, investors, and all the stakeholders.

-detection and prevention of frauds.

And also audit helps in better planning and budgeting

All the above benefits makes organisation stronger rather than focusing on expensive spendings.

Thank you:-)

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