Many businesses assume that an audit is only really needed where they are required to conduct one by law, or where they are asked to carry one out by a third party – perhaps as part of due diligence during a sale.
In reality, an audit can help business performance in many ways that other forms of reporting cannot.
Often an audit report brings new, deeper insights into a business, its process and the markets that it operates within.
Key performance information offered by an audit includes:
- Comments about the industry and market
- Comments on company processes and policies
- Identification of company inefficiencies, redundancies, and risks
Combined with other information that a business may hold about its key performance indicators from its general accounts or specific management accounts, an audit can give a clear picture of financial health and expose potential opportunities and weaknesses.
This level of business intelligence is essential for business owners looking to make key decisions about their future and will, with the right steps, make a business more resilient over time.
There are no strict guidelines for how to conduct an audit. However, it can usually be divided into five stages that aid the review of a business’s performance. These are:
- Planning – Sorting a timeline for the audit and identifying any business goals.
- Risk assessment – Identifying the key risks from a financial standpoint.
- Strategy – Creating a strategy for testing and addressing those risks.
- Gathering evidence – Gathering data and analysing the financial state of your business.
- Finalisation – Evaluating the evidence and concluding whether the financial statements have any issues.
How auditors go about the process can vary, with different auditors preferring different styles of operating.
However, the end result should be a report that lays out a company’s current risks and finances.
If you would like to know more about our audit services, please contact your Seymour Taylor representative today or email email@example.com or call 01494552100.
This blog is for guidance only, professional advice should be obtained before acting on any information contained herein. The information was correct at the time of publishing 26th May 2022.