- It is an expensive operation because audit fees and audit expenses are usually too high for small companies.
- If the report arising out of audit is bad, it can lead to the failure of the business (a qualified report).
- An audit may not be ideal for small business whose transactions are too few.
- An audit may not in most cases be in the interest of the owners, especially if they are the managers in which case they may end up frustrating the entire process.
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