Financial Statements Audit
In hospitals in India, three key Financial Statements Audit are audited:
◘ Income Statement:
Also known as the Profit and Loss (P&L) statement, this Financial Statements Audit provides a summary of the hospital’s revenues, expenses, and profits or losses over a specific period.
It offers insights into the hospital’s financial performance, including details about revenue streams from services like patient care, diagnostics, surgeries, and other sources.
Expenses such as salaries, medical supplies, utilities, and administrative costs are also detailed here.
The audit of the income statement ensures that the hospital’s financial results are accurate and comply with relevant accounting standards.
◘ Balance Sheet:
The balance sheet offers a snapshot of the hospital’s financial position at a particular point in time.
It presents the hospital’s assets (such as buildings, medical equipment, investments), liabilities (like loans, accounts payable), and shareholders’ equity.
The audit of the balance sheet verifies the accuracy of the reported values and ensures that assets and liabilities are appropriately categorized and valued.
This statement is crucial for assessing the hospital’s solvency, liquidity, and overall financial health.
◘ Cash Flow Statement:
This statement tracks the inflows and outflows of cash in the hospital over a given period.
It categorizes cash flows into operating activities (like patient payments, supplier payments).
Investing activities (such as purchase or sale of equipment), and financing activities (like loans and equity transactions).
The cash flow statement helps auditors evaluate the hospital’s ability to generate cash and manage its liquidity.
It ensures that cash movements are accurately reported and that the hospital’s cash position is in line with its operations and financial decisions.
To visit: https://www.mca.gov.in/
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