The financial statements of companies are published at the end of each fiscal year. These financial statements generally include the statement of profit and loss, the statement of financial position, a documentation of changes in revenue, and a cash flow statement as well. These documents are released to the public, highlighting the company’s fiscal performance in the past year. Financial statements can be used by investors to decide whether to invest more money in the company, or even to pull out entirely. They can also be used by the general public to figure out whether the company is in a good financial position.
The government also uses the financial position to determine whether there’s any risk of fraud or not. Growing companies generally publish increasing revenues on a yearly basis, which obviously increases the amount of scrutiny from government firms. In case the government orders an official enquiry into your financial statements and demands an audit report, you will need to hire an external audit firm in order to comply with the regulations.
An insurance accountant company, such as Accountancy Insurance, can protect you in case this happens. If you have an insurance policy for accountancy related issues, the company will reimburse the professional fee charged by the audit firm. They will also reimburse the professional accountant in the case of an investigation or an external enquiry into your business practices. The good thing about buying such an insurance product is that it mitigates the financial downside involved with external enquiries and investigations.
Why You Need it
One of the major reasons why you should consider purchasing an insurance policy is that it gives you the freedom to practice without any worries. In case there’s an official enquiry into your practices, the policy will provide coverage for audits and investigations. It also prevents a lot of disputes that usually arise between practitioners and clients. Buying an insurance policy from Accountancy Insurance can also help prevent potential write offs. The insurance firm will pay off the fee directly to your company, making it easy for you to recover the amounts owed.
Another reason why you should purchase this type of policy is because there’s no cost incurred for you to offer the service to your clients, which allows you to build long-term relationships with your clients. This shows that you are always looking out for your clients, which in turn considerably enhances your company’s goodwill.
How to Purchase an Insurance Policy
Most companies that offer such insurance policies generally provide tailored products to their consumers. When you contact the company, they will first take a look at your history. The insurance company will want to know about your past performance, and the premium will obviously be higher if your company has been exposed to a number of investigations and audits in the past. If your company’s history is clear, you can expect to pay a reduced premium. Buying an insurance policy is generally a wise move, since it offers protection in case something goes wrong.