Four reasons an audit is valuable for your business

Audit.jpg.jpg

Your annual audit should be seen as more than just a box-ticking exercise. It is a process that can add value to your business in many ways.

What is an audit and why is it needed?

An audit is the independent examination of an organisation’s financial records, which includes a review of risk management procedures, internal controls and compliance with legal and regulatory requirements. The auditor will produce a report for inclusion within the financial statements and may also report to the directors with recommendations for improvement.

The goal of an audit is to provide assurance that your company is managing its risks effectively and that its financial statements are accurate. Mandatory audits are required by law while voluntary audits are conducted at the discretion of a company.

How valuable is an audit

An audit can be a powerful tool, providing the following benefits for your business:

Identify opportunities for improvement and growth              

The information an audit provides can be vital in helping make business decisions. Recommendations in the auditor’s management letter can be used as a key aspect of your board’s quarterly strategic planning.

These recommendations can cover aspects of improving internal controls to reduce the risk of fraud and errors and may identify opportunities for improvement to help your business operate more efficiently.

Through their analysis, an auditor can highlight where there are opportunities to reduce costs or increase profitability. Comprehensive management information and an acute understanding of your business’ key profitability drivers can be used to actively manage and drive improved business performance, as well as being really useful during the sale process.

An audit team with their ‘radar’ attuned to the right things will also bring to the attention of management other matters that can affect risk and value – including an absence of key commercial contracts, over-reliance on key members of staff/customers/suppliers and gaps in the management team. It is the role of an adviser to challenge management’s assumptions and alert them to best practices. They will also highlight new developments in legislation, allowing businesses to plan for upcoming changes in advance.

Increase transparency and credibility

An audit helps to increase transparency, which provides assurance to stakeholders and potential investors that your financial statements are accurate and reliable. Lenders or investors may want your financial statements audited before they will provide funding or invest as they need to be confident your business is financially sound before taking on any risk.

Meanwhile, ensuring that your business is properly prepared for a due diligence process, not only greatly reduces the stress of a business sale but also delivers enhanced comfort and confidence to buyers, reducing the perception of risk.

Protect business reputation

Similarly, an audit will help improve your overall risk management and governance policies, which can make your business more resilient to unexpected events and protect its reputation.

A robust approach to corporate governance reduces the perception of risk to a prospective buyer, while simultaneously assuring the buyer that any ‘post-deal’ transition will be as seamless as possible, and an excellent compliance record and attitude to compliance, particularly with regard to HM Revenue & Customs, will always reduce the perceived risk to investors and acquirers.

Better communication

Another added benefit, and one benefit that is often overlooked, is improved communication, both in terms of frequency and the quality of interaction with your advisers. With regular meetings, your adviser will have a greater understanding of your long-term ambitions, meaning to audit process can be aligned with these goals.

To find out how an audit could benefit and add value to your business, please contact us for more information.

Enjoyed this? Read more from Pierce CA Ltd

Latest news

1

Historic Blackpool building to house business growth hub Blackpool Stanley Buildings

Historic Blackpool building to house business growth hub

05 Dec 2023

2

Plans approved for 800,000 sq ft Preston industrial scheme Aptus visuals

Plans approved for 800,000 sq ft Preston industrial scheme

04 Dec 2023

3

Cruise firm doubles turnover to hit £20m Panache Cruises team

Cruise firm doubles turnover to hit £20m

06 Dec 2023

4

Angela Kershaw named head of business growth at Blackpool Council Angela Kershaw.jpg.jpg

Angela Kershaw named head of business growth at Blackpool Council

06 Dec 2023

5

Youth Zone appoints new chair as Straw steps down Wayne Wild

Youth Zone appoints new chair as Straw steps down

06 Dec 2023

Fob Advert 980x120
Background image for hub sign up block

LBV Hub

Reach 50,000 members of the Lancashire business community

Post your news
Post your events
Post your offers
Company profile
Social reach
Magazine coverage
Sign-up
Events
Help to Grow Management Course
Collaboration v3.png.png
LBV Hub Seminars
31 Oct 2023 - 14 Feb 2024

Help to Grow Management Course

University of Central Lancashire, School, Online and face-to-face , UCLan, PR1 2HE

09:30 - 11:30

Business Networking in Preston - BNI Diamond
EVENT LISTING BNI Diamond.png.png
LBV Hub Networking
06 Dec 2023

Business Networking in Preston - BNI Diamond

Norman Jepson (Beefeater), Bluebell Way, Preston, PR2 5PZ

07:15 - 09:00

Business Networking in Lancaster - Eden Business Network
Eden Business Network.png.png
LBV Hub Networking
06 Dec 2023

Business Networking in Lancaster - Eden Business Network

The Borough, 3 Dalton Square, Lancaster, LA1 1PP

18:30 - 20:30

Twas the night before ransomware
Event Graphic 3.jpg.jpg
LBV Hub Seminars
07 Dec 2023 - 07 Dec 2023

Twas the night before ransomware

The Lowry Theatre, Salford Quays, M50 3AZ

14:00 - 17:00

Business Networking in Burnley - BNI Kudos
EVENT LISTING BNI Kudos.png.png
LBV Hub Networking
07 Dec 2023

Business Networking in Burnley - BNI Kudos

Prairie Sports Village, Windemere Avenue, Burnley, BB10 2FU

06:45 - 08:30

Discover the power of BNI - Business Networking in Preston
Preston.png.png
LBV Hub Networking
07 Dec 2023

Discover the power of BNI - Business Networking in Preston

Samlesbury Preston Hotel, Preston New Road, Samlesbury, PR5 0UL

09:30 - 11:00

The Business Network Central & East Lancashire
LBV Hub Networking
07 Dec 2023

The Business Network Central & East Lancashire

Stanley House, Blackburn, BB2 7NP

11:30 - 14:30

Business Networking in Lancaster - BNI Castle
EVENT LISTING BNI Castle.png.png
LBV Hub Networking
07 Dec 2023

Business Networking in Lancaster - BNI Castle

Vale of Lune RUFC, Powder House Lane, Lancaster, LA1 2TT

06:45 - 08:30

Business Networking in Preston - BNI Brunch
EVENT LISTING SIZING Brunch .png.png
LBV Hub Networking
08 Dec 2023

Business Networking in Preston - BNI Brunch

Samlesbury Hotel, Preston, PR5 0UL

09:30 - 11:00

Business Networking in Blackburn - BNI Infinity
EVENT LISTING BNI Infinity.png.png
LBV Hub Networking
08 Dec 2023

Business Networking in Blackburn - BNI Infinity

Hampton by Hilton, 2 Frontier Ave, Blackburn, BB1 3AL

06:30 - 08:30

Business Networking in Chorley - BNI Endeavour
EVENT LISTING SIZING Endeavour.png.png
LBV Hub Networking
12 Dec 2023

Business Networking in Chorley - BNI Endeavour

Oak Royal, Bury Lane, Withnell, Chorley, PR6 8SW

06:30 - 08:30

Business Networking in Blackburn - BNI Vista
EVENT LISTING SIZING Vista.png.png
LBV Hub Networking
12 Dec 2023

Business Networking in Blackburn - BNI Vista

Hampton by Hilton, 2 Frontier Ave, Blackburn, BB1 3AL

06:45 - 08:30

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV Advertising Visual NovDec
Subscribe now

Weekly news bulletin