Conducting a professional audit of a business is serious business. It can provide a company owner with all the statistics and analysis to make brave decisions relating to the future processes and machinations of a company; ultimately helping to decide whether a company fails, treads water, or moves forward and grows due to the changes implemented after the audit has taken place. An audit is best conducted and delivered by an impartial outsider, from a professional audit service that can gather information about the running of your business.
Audits can take place concerning just the financial side of a business, or encompass many other aspects, such as internal processes, marketing and brand consistency, and compliance issues. The evidence and statistical analysis collected during a company audit will include documentation relating to financial transactions that the company has received or conducted, any documents related to company policy, invoices and reports produced by the company and any information that related to the specific processes and protocols that you have in place within your organisational framework as a business.
A team of auditors will visit your company premises and discuss these points with the relevant departments and individuals, securing the correct information and amounts of information. It is vital that enough evidence is collected in order to portray an accurate reflection of the business as a whole. Within a financial audit, for example, there will be a collection of financial transactions to a credible sample size to determine the overall health of the company financially, without having to trawl through all financial transactions relating to the company.
It isn’t enough to focus on one financial area of a company, so it will be expected that a variety of financial transactions are sampled. This can include invoices, receipts, supplier payments, inventory reports and much more. The audit team will investigate to see whether the evidence collected matches up with the internal system that your company uses to track all finances.
Once financial evidence has been collected from the company, a team of auditors can begin to look elsewhere to corroborate the information being provided. This type of approach includes speaking to banks and credit facilities that may have been used by your company, acquire information from suppliers and even some customers as a way of determining whether all financial transactions being provided are correct and not a sign that further financial investigation should take place. Confirming data and evidence provided through third parties ensures the next phase of an audit can begin.
The verification process is important as it provides credibility to the audit and allows for the right type of statistical analysis to be picked up on by the auditors and pointed out to your company. So, if certain records don’t add up to receipts, for example, it can be rectified.
Impartial audits of the finances (and other aspects) of a business is an important matter as it ensures financial compliance is being adhered to and that all parties are performing their duties above board and with the law in mind. It also ensures that customers and employees are being treated fairly at all times