How can an audit benefit your business?
There are numerous advantages to a financial audit, some of which are:
- Credibility of published information – aids decision making by directors and investors
- Increased stakeholder confidence, I.E banks, financers, shareholders, customers and suppliers
- Deterrent and detection of fraud
- Opportunity to identify weaknesses or improvements to accounting and business processes
- Taxation issues – opportunity to detect non-compliance with direct taxes such as PAYE and VAT
- Increased confidence for potential acquirers
Advice on the structure and operations of systems
Part of the auditors’ routine work involves the assessment of accounting and internal control systems. It is common for auditors to report to directors on structural and operational weaknesses in systems and to make recommendations for improvement. This advice can be invaluable where directors are inexperienced in such matters.
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.
credibility of published information
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 critical of poor quality information. Financial information is available to a wider audience than ever before, thanks to the internet. 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.
Minimising exposure to fraud
The audit process can be an opportunity to identify weaknesses in the financial controls of the business which may assist with mitigating the risk of fraud. We will provide a summary of any significant weaknesses identified by the audit process. In addition the knowledge of an audit being undertaken can itself act as a deterrent in some circumstances.
Taxation issues
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.
Are you unsure if you need an audit?
All companies must have an annual audit subject to some exemptions. Our ‘Do I need an audit?’ guide provides additional information, however do contact us if you require additional assistance.