Lara owns a mid-sized company that has been in business for 10 years. The business has always covered its expenses, but it has never made the kind of profit that Lara anticipated when she started it. She decides to hire an outside accountant to audit her finances. How will this help her business?

Question

(1 point)
Responses

It will dramatically improve the finances of the company.

It will dramatically improve the finances of the company.

It will let her determine whether or not the company is profitable.

It will let her determine whether or not the company is profitable.

It could let her know if there are issues with her internal accounting.

It could let her know if there are issues with her internal accounting.

It won’t help much since she already knows that the business is not very profitable.

Answer 1

The best response is:

It could let her know if there are issues with her internal accounting.

This option highlights the potential for the audit to uncover discrepancies, inefficiencies, or mismanagement in the accounting practices that could be affecting the company's profitability. While it may help her assess overall profitability or confirm her suspicions, the focus on identifying internal issues is a significant benefit of hiring an outside accountant.