Why Conduct a Business Audit?
If you are looking to seek confidence that you and your company is meeting its core business goals, internal auditing is essential and would give you a clear vision of how well your company’s internal operation is and where the problem lies if misstatements were to be found.
At the same time, having internal audit can also protect your enterprise against fraud and prevent fraudulent activities such as thefts, unauthorized personnel’s entry into warehouse etc. These will cause overstatements in goods in the company’s record if inventories were to be stolen or damaged.
If you are worried that your company is not following the current laws, regulation and standards that applies to your organization, having internal audit will help reduce the hassle of you having to study all laws and regulations again.
Role of an Auditor
The role of an auditor include:
Ensuring and watching over your company’s integrity and accountability
Scrutinising your financial reporting
Safeguarding your company against frauds, errors, and risks
Providing objective assurance that your company is adhering to the rules and regulations
All of these helps the company to avoid penalties in any event of arrears, which can amount up as financial losses.
Benefits of Auditing Your Business
Completing an audit shows your company can be trusted and reliable as it shows the company is fulfilling their necessary responsibilities and obligations. There are companies in which their reputations build around how well they manage their assets.
Some of the benefits are:
1. Strong internal controls
Internal audits evaluate your internal control activities, which comprise of:
Physical control over assets and records
Proper procedures for Authorization
Independent internal verification
Segregation of duties
2. Process Efficiency
Internal audits help to identify gaps in your business operations, procedures and your governance processes while providing appropriate recommendations on how to solve the misstatements.
Internal audits review through your business’s cybersecurity environment to check for any vulnerabilities and if they are secured to your security standards. Auditors will provide and recommend on the possible ways to mitigate the issues raised.
Apart from cyber security, physical security is also reviewed on as to how accessible the storage room storing the inventories is. The easier it is to access, the higher the chance of goods and inventory being stolen which is not ideal for the company.
Internal audits analyse and review your financial statements and verify their accuracy and integrity. Especially in recent times, fraud has been increasingly common, hence the need for audit is extremely necessary to avoid financial losses.
5. Reduced risks
Internal audits consider all the identified risks to your enterprise and analyse whether your risk mitigations are strong. Again, your auditor will identify the gaps and report back to you on the potential ways to go about resolving the issues.
6. Improved compliance
Internal audits check the laws, regulations, and industry standards with which your organisation needs to comply and whether the company is adhering to these guidelines. If there are any issues on compliance, your auditor will have to raise an issue and provide suggestions on how to solve them.