The importance of looking ahead

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‘Will you be trading 12 months from now?’

What sort of question is that for an accounting firm to ask a client?

Moore Stephens New South Wales’ Audit Partner Elizabeth Perez makes no apologies for asking some hard, pointed – sometimes even uncomfortable – questions of clients and this one is a regular.

It all boils down to how to value your business’s true net worth.

If there’s doubt about your company being a ‘going concern’ in 12 months, the auditor needs to take that into consideration when reviewing your accounts.

For example:

  • How much of your stock can be sold off and how much is obsolete/last season? If obsolescence is an issue, the value of stock on your books may be over-inflated.
  • What would assets sold in ‘fire sale’ conditions bring compared to a business buy-out or take-over?
  • Are you carrying credit that needs to be written off? Likewise debtors.

The question ‘will you still be trading in 12 months?’ can also give you cause to stop, think and plan your future.

Moore Stephens New South Wales have the strength and confidence to ask tough questions and the experience to be able to put viable solutions forward for your best outcome.

Call Elizabeth Perez on +61 2 8745 3433 now.