ADVANTAGES (IMPORTANCE) OF AUDITING

FOR GOVERNMENT

  1. 18.       BETTER PERFORMANCE OF TAX DEPARTMENT: Tax officers accept the audited accounts. The assessment order can be issued without further clarification. There is saving of money and time due to audited accounts. The performance of tax officers is improved.
  2. 19.       EXACT REVENUE AMOUNT: The collection of revenue is possible at an early date. The people are allowed to deposit various kinds of taxes. The recovery of income is made at the start 2f the year. The government can start welfare projects on the basis of total revenue collected.
  3. 20.       PROGRESS OF ECONOMY: The true and fair view is stated in theaudited accounts. The stage of economic progress can be determined. The government can take measures to raise the rate of economic growth.
  4. 21.       PURCHASE OF PRIVATE BUSINESS: The private business houses may not work in favour of general public. The government can take over such business units. The purchase price is decided on the basis of audited accounts.
  5. 22.    SALE OF GOVERNMENT BUSINESS: The policy can be framed on the basis of audited accounts. The management comes to know the value of business. The government can sell state-owned units to private sector. The bid price is settled on the basis of audited accounts.
  6. 23.       INSPECTORS: The audited accounts show fair value of all assets. The value of assets is the basis of tax. This issue can be settled through audited accounts. The auditors are experts of their field. They know all the methods of property valuation. They can issue certificate to satisfy the government agencies for valuation of property.
  7. 26.    INSURERS CAN SETTLE CLAIMS: The settlement of fire and marine insurance claims is easy through audited accounts. The policyholders and insurance company can settle actual loss of
  8. property.
  9. 27.    NO LOSS TO LENDERS: The banks and other lenders can ask the borrowers to submit audited accounts before granting loans. The audited accounts are helpful to check the trustworthiness ofcustomers.
  10. 28.    CREDITORS ARE PROTECTED: They can know the true performance of their debtors. The creditor can accept this,promise only when feels that debtor is reliable businessman. Audited accounts provide basic information about reliability.
  11. 29.    BIDDERS CAN OFFER HIGH RATE: Audited accounts provide information about net worth of any business. The people interested in purchasing the business can rely on such information. They know the fair value of business. They can .offer reasonable price through open bidding.
  12. 30.    BETTER PAY FOR EMPLOYEES: They are interested in profits. Audited accounts provide true and fair view of profits. The employees can demand for higher pay, fringe benefits and participation in profits. Audit of accounts by an independent person help the employees to make settlement with their employers.
  13. 31.    INVESTORS CAN TAKE DECISIONS: The audited accounts can be used to calculate the value of shares and other securities. The bargain power is given to the people who have the money and they want to earn income. They can protect their rights through reliable informationi

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