Almost every business out there has staff members, technical systems, office locations and functions that are operated by different people at once. Since this may result in a higher risk of irregularities or errors in the business, though, it would be highly advisable to carry out a business audit to check fraud and deter it. Here are others ways on how you can benefit from a business audit.
Know the Flaws of Accounting System
For starters, an audit can help you pinpoint any flaws in your accounting systems and help you find ways to improve them as needed. If there are any directors in your company who aren’t involved in these accounting systems, an audit can assure them that things are going smoothly and according to the information that they get on a daily basis, for that matter. It can also help reduce the scope for poor accounting and fraud overall.
Get Detailed Insights Reports of Your Business
An audit tends to give great advice on various financial benefits that a business can reap, including how it should be run, what margins it should expect and how to reach those margins to begin with. This advice may also include things like tightening the internal controls to reduce the overall risk of tax planning or fraud. An audit will also add credibility for employees, suppliers, investors, tax authorities and customers.
Without an audit, your credit ratings might actually get affected. Suppliers might not be able to give you the right credit limits, for example, and trade suppliers and banks might not look on you as favourably as they would if credit rating agencies actually assessed your company with an audit. Aside from that, the HMRC might consider your figures to be much less reliable than usual. Plus, if ever you have insurance claims fall at your feet, loss adjusters might not be on your side as much as they would be if your accounts were audited.
Audits would also prove to be beneficial if your company is constantly growing and looks as if it will exceed the turnover threshold pretty soon. This way, you can avoid revisiting previous figures after reaching that particular threshold. If you are planning on selling your business within the next few years, then it would also be highly beneficial for you to carry out audits on a regular basis since they can improve your reliability and credibility in the eyes of potential buyers in the end.
Colin Smith & Co. has been in business since 1979 and provides professional auditing services to small and medium sized businesses in South Africa.