Accountants and auditors generally need to perform a series of different processes and procedures in order to ensure that the figures quoted on the financial statements are correct. There are strict reporting and regulatory requirements that must be met in order to ensure that the investors get accurate information from the financial statements. An audit is basically a review of the accounts by an audit firm. The auditors then form an opinion about whether the financial statements are free from material misstatements or not.
However, audits cost a lot of money. Generally, audits are mandatory for listed companies. However, many private companies also get their accounts audited in order to maintain transparency and boost confidence amongst the investors. Simply put, an audit helps investors build confidence in the accounts published by the company, since they know that there are checks and balances. Now, what if the accounts were published, and due to some minor mistake, the tax and regulatory authorities required another audit to be carried out on the accounts of the company?
Accountant professional liability insurance was designed to protect the company’s accountants and to relieve their responsibility in such regards. It’s offered by private firms such as Accountancy Insurance. This insurance policy is offered by private insurance firms that only specialise in selling tailored insurance products to different types of companies.
Why Buy Accountant Liability Insurance?
There are several reasons why you should consider buying accountant liability insurance. Basically, the insurance policy covers the professional fee charged by auditors if your firm has been the subject of an enquiry or investigation by the Australian Taxation Office. As your company grows and the figures on the financial statements continue to increase, your company will come under increased scrutiny from the authorities. In case there’s a review or an investigation, the government agencies might require you to get another audit completed. This might have a severe impact on your company’s finances. Rather than go through the hassle, buying accountant liability insurance from Accountancy Insurance protects you from any such issue.
Even though buying accountant liability insurance is a prudent idea, there are plenty of other benefits that you gain as well. First of all, since it covers the fee of any investigation or review, you will be able to avoid disputes with your clientele that might be caused as a result of the audit.
Furthermore, you should know that the fee amount is paid directly to the company. There are no excess payments either, which makes it the perfect option for growing businesses. Before buying any type of insurance policy, it’s always wise to do a bit of research. You should request quotes from two or three different companies and then compare the features and prices before making a decision. The insurance premium will be calculated based on your company’s past performance. If your company has been the subject of investigations and reviews in the past, the insurance premium will obviously be much higher. Therefore, it’s best to compare all of the features offered by the policy before you make your decision.