in Business - 21 May, 2019
by Curtis - no comments
The Risks Of Auditing Government Contractors

The true financial profile of a company can only be determined by registered company auditor in Norwest after reviewing all financial statements and accounting records. Auditors protect the public from investing on companies with corrupt business practices. There are companies that attempt to defraud prospective investors by presenting them with false financial statements.

Government contracting is a big business that requires auditing services and tax preparation. These services are usually provided by independent CPAs or accounting firms. There are more than 4 million contractors serving the US government and collectively receive more than $500 billion a year. However, government contracting includes special risks that can significantly affect contractors and the accountants they retain.

There are instances when it is not obvious that the client is a government contractor. Many companies that provide services to the private sector have contracts with the federal, state or local governments. Most enterprises that offer construction, information technology and manufacturing services have involvement with the government and for-profit firms.

CPAs that also work as auditors have to be alert when dealing with clients that have government contracts. There are companies that dabble in government contracting that have inadequate internal control to be able to handle the challenges of selling to the government. These clients usually face unique pressures that can make auditing particularly challenging.

There is no question about the profitability of government contracting but sometimes government vendors navigate mind-boggling bureaucracies, unintelligible contracts and multiple regulations from various sources. Additional challenges include unrealistic obligations, lobbying restrictions, payment delays and counter intuitive ethical standards.

Government contracts are very rarely terminated; most of them are usually renewed. However, the government reserves the right to terminate for cause or conveyance and cancel funds if not appropriated. When interaction with the government fails, the results are usually catastrophic for a business. An auditor has good reason to be concerned with the risks of dealing with these clients.

Organizations whether big or small have to face auditing and assurance requirements. Large private companies have to comply with the rulings of Australian Securities and Investment Commission as well as non-profit organizations and charities. Complete auditing and assurance services are provided by registered company auditor in Norwest that guarantees impartial, thorough and efficient results.