In previous articles
We have explained in previous articles that before investing in any business/company, you should be reassured of the transparency and competence of the executives and financial managers, as well as knowing the business model adopted by the company, reviewing its financial statements, and knowing the company’s certified public accountant, the company’s legal papers, and partnership guarantees.
We have talked about executives and financial managers, the business model, and financial statements, and now comes the role of the independent auditor.
The neglected role of the certified public accountant
Certified Public Accountant/ Independent Auditor/ Chartered Accountant are all terms that describe a very important and unfortunately very neglected role in Egypt for someone whose role is to ensure the company’s financial and legal statements, its tax compliance, and its transparency before investors.
In a healthy business environment, the independent chartered accountant reviews the company's financial statements, corrects their errors, if any, writes his or her comments on them, and finally approves them to be used later with the tax authorities, investors, lenders, or other official or unofficial bodies.
The absence or shrinkage of this role makes the investment environment, in general, unhealthy. The company’s financial statements, which describe the extent of its profit or loss, are not fully credible except with a review from accredited external accounting offices.
Before investing in any business, it is highly recommended to know the certified public accountant and request financial statements approved and sealed by him or her. You can also hire another certified public accountant to review and audit the business’s financial data. This reduces the possibility of manipulating a company's financial statements and creating inaccurate or misleading financial statements.
When assessing a company for investment, having a certified public accountant is not just a plus, it is an essential indicator of financial health, ethical integrity and long-term growth potential. A CPA-backed company provides investors with assurance that their investments are based on solid, reliable financial data, leading to better investment results.
Also, in a healthy investment environment, it will become clear who is the independent chartered accountant who is accurate and honest in their work who stands neutral between the company and investors and evaluates the company’s financial statements objectively.