The business benefits of the audit

For many businesses, the audit is a statutory requirement and that does mean it can feel like a box-ticking exercise, rather than something that is great for the health of your business. 

However, an audit does in fact bring many benefits and should be embraced.  

Here, Head of Audit Compliance at BG Audit, Nick Marshall, gives a quick insight into some of them. 

An audit helps improve compliance

Financial compliance is a professional speciality and not all business owners have the correct set of knowledge, or simply the time to ensure their business is consistently up to date with the latest regulations – which can and do change.  

Having an audit brings peace of mind as the collective knowledge and expertise of your auditor will ensure your financial reporting is robust. 

The audit process sometimes unearths adjustments that are significant for tax purposes and without an audit, tax compliance for many companies would be significantly more difficult than it is at present. 

Highlights vulnerabilities in systems and controls

The assessment of accounting and internal control systems is part of the auditors’ routine work.  It is common for auditors to report to directors on weaknesses in the financial controls of the business and recommend improvements.  

Gives clear vision for growth

An audit can be a hugely positive and beneficial process for your business. It’s essentially a health check and will result in a clear picture of how your business is performing, giving you the tools to fix problems and a clear vision of your strengths in the marketplace, empowering you to seize opportunities and continue to grow. 

Minimises exposure to fraud

Identifying weaknesses in the financial controls of any business is vital, so an audit may also assist with mitigating the risk of fraud. In addition, the knowledge of an audit being undertaken can itself act as a deterrent in some circumstances. 

Gives businesses credibility

 Without credible, high quality financial information, decision-making by directors and investors is both difficult and unsafe. Both institutional and private investors are increasingly active and will be critical of poor-quality information. More than ever, financial information is available to a wider audience. It is important that such information is of the highest possible quality. Employees, customers, suppliers and many others are increasingly willing and able to voice their dissatisfaction where information lacks credibility. The audit helps smooth the wheels of investor, customer, supplier and employee relations.  

Good corporate citizenship

Reputational risk is now recognised as a major risk facing larger companies.  A good reputation is important for businesses of all sizes and investment in audit is recognised as an essential element of good corporate governance both in the UK and internationally. 

For more information on the process and benefits of an audit, or to discuss your audit requirements please contact us via email to info@beatons.co.uk or call 01473 659777.