Discussion Board
My position would be in support of having an annual external audit. Having an
annual external audit by an unrelated party mitigates risk and clears the company of
any potential conflicts of interest. The price of a certified third party audit is well
worth the cost, considering the risks involved in not doing it. Having a family
member, as an auditor is a big conflict of interest, not to mention, financial
experience is not the same thing as a CPA. What credibility does his uncle have?
I would recommend the company hire the uncle as an internal auditor. This will help
ensure integrity of financial statements for operational purposes, but also hire a
certified public accountant or firm to perform annual audits, which give
shareholders transparency to the financial health of the company, piece of mind that
what the financial statements say is true, and after performing their first external
audit, the company will have gained credibility at its highest level, unlike the first
seven years of operation. That increases perceived value and attracts more
investors.