It is much better to buy a wonderful company at a fair price than to acquire a fair company at a wonderful price. (Warren Buffett)
Even if there is no statutory audit requirement, a voluntary annual audit represents a quality-boosting alternative, which aims to increase the credibility of the declarations made in the financial statement and to ensure the reliability of the financial data.
Therefore, both statutory and voluntary audits have a major impact on economic reality. A neutral third party, an auditor, is appointed for the exchange of information i.e. the annual accounts to avoid conflicts of interest between executives and addressees such as creditors or shareholders. If the annual accounts are to be used as a basis for decision by the recipient, the appointment of a trusted third party is essential as recipients often lack the expertise required to assess the quality of the information.
We analyse the economic and legal situation of your company as part of a voluntary audit of annual accounts. We also ensure that accounting principles are adhered to.
Potential report addressees include investors and credit institutes. Trust and security in bank lending is established by presenting evidence of lawful earnings. An audit certificate issued by the auditor also improves your bank ranking. An external audit of annual accounts is issued in a credit agreement, if necessary.
While you, the company seller, base your target sale price on audited annual accounts or tested quarterly or bi-annual reports, the prospective purchaser of the company should always conduct a due diligence audit. During such an audit, we examine the plausibility of the figures and treaty of the company to be acquired, disclose intra-group and external issues and point out potential risks.
As managing director of a limited liability company you can also reduce your liability to your shareholders by appointing a neutral third party. As a shareholder of a limited liability company, you can also request the audit of the annual accounts as a way of monitoring the managing director. Your articles of association may stipulate a voluntary audit of annual accounts. By doing so you can avoid potential conflicts of interest.