Benefits of auditing your business
In the UK, a business is legally required to undergo a statutory audit if it meets or exceeds certain financial criteria, known as the audit threshold. However, there are also significant benefits of auditing your company’s finances even if a statutory audit is not yet required.
An audit is more than just a regulatory requirement; offering valuable insights that can enhance a business’s decision-making process, improve operational efficiency, and boost credibility with stakeholders. They provide a clear, independent overview of your business’s financial health, ensuring that financial statements are accurate and compliant with regulations. Sean McCann, Corporate Partner at Price Bailey details below the key benefits that auditing can bring your business.
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The benefits of company auditing
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Improved credibility
An audit provides an independent and objective assessment of your financial statements. An independent and robust audit will not only benefit those within the business but also offer you credibility with your lenders about your company’s past performance. Having an audit can also make it easier to attract future investment, credit, finance, staff etc.
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Improved accuracy
When completing an audit, any potential errors in the reported numbers (based on a sample of transactions tested) will become apparent to the auditors. These errors would be reported to management along with suggestions on how to improve financial controls or processes to avoid similar errors occurring in the future.
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Valuable insights
The majority of auditors will have experience working with an array of businesses in different industries, sectors and financial situations. This wealth of knowledge can lead to better efficiency and effectiveness in your business operations. Insights gained from audits can inform better strategic decision-making and long-term planning improved and more accurate forecasting etc. Audits can provide more value than just financial insight.
Read here our Price Bailey article detailing further reasons as to why you should consider an audit.
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Exposing fraud
Whilst not a guarantee of an audit, an audit could uncover fraudulent activities or weak internal controls which could be changed to prevent fraud in the future. Findings and recommendations for improvements of internal controls would be reported to management and could reduce the risk of fraud by prompting consideration of better internal controls.
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Ensuring regulatory compliance
Audits ensure compliance with various financial and/or tax regulations in line with industry standards, which will reduce the risk of legal issues in the areas audited by the auditors. Any findings will be reported to management so they can address issues and ensure errors are not carried forward. This means the risk of penalties and fines is minimised.
Can an audit save you money?
Despite an audit seeming like an unnecessary cost or another ‘tick box’ exercise, in the long term, having an audit can lead to unmatched financial transparency and clarity. An audit allows you to identify pitfalls or unnecessary expenditures that might otherwise go unnoticed. By understanding where your business is spending money, changes can easily be implemented making an audit a positive investment for any business looking to improve its financial performance.
At Price Bailey, our team of experts, with specialist industry experience tailored to your business, can offer a comprehensive audit service to enhance your business’s profitability, financial transparency, strategy, and therefore financial growth.
We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.
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