Did you know that there are some significant benefits of auditing your company’s finances regularly, even if you don’t require a statutory audit? Read on if you’re interested in understanding the benefits of audits for your business.
While some companies might see audits as a box-ticking exercise, the advantage of auditing extends far beyond meeting legal obligations. In this guide, our expert financial audit specialists will take you through seven key advantages of auditing that can help your business improve its financial health, enhance credibility, and make informed decisions for future growth.
7 key benefits of auditing
Wondering do I need an audit? We know that audit thresholds can sometimes be confusing to navigate. Once you’ve identified whether or not you’re legally obligated to undertake one, you might want to consider commissioning one regardless. We provide clarity on exactly why you should consider the advantage of auditing to your business, even if it’s not a legal requirement. Below, we’ve identified 7 key benefits for your consideration.
Helps influence budgetary decisions
When you have a definitive financial picture, it’s much easier to forecast your business’s liquidity and allocate it accordingly. That way, you can prioritise investing in the areas that will have the most impact.
Audited financial statements provide reliable data for making informed budgetary choices, allowing you to optimise resource allocation and make strategic decisions with confidence. This can help to ensure your budget aligns with your business goals.
Increases shareholder confidence
Another key advantage of auditing is its ability to boost shareholder confidence. When a company undergoes an audit, it demonstrates a commitment to transparency and financial integrity. This, in turn, reassures shareholders that their investments are being managed responsibly – for instance, by updating shareholders with the latest, accurate business valuation.
By regularly conducting audits, businesses can maintain and enhance shareholder trust, which is crucial for attracting and retaining investors.
Reveals under and over-performing areas
With a clear understanding of which areas of your business are performing profitably and which aren’t returning on spend, you can make data-backed decisions about what to optimise.
As an audit is an unbiased and complete assessment of all of your firm’s financial data, you’ll be able to see exactly how products, segments, and divisions are performing with absolute clarity. This might mean identifying areas where costs are overrunning or potential untapped opportunities to leverage.
Give confidence in anti-fraud measures
Getting an independent review of your finances means that you know exactly what you’re spending and where. No stone is left un-turned in an audit, so any unauthorised transactions or suspicious activities will be detected. This provides peace of mind and helps protect your assets from potential fraud.
One very tangible benefit of audits is the ability to demonstrate to stakeholders that you take your financial integrity seriously and have robust measures in place to prevent and detect any fraudulent activities.
Confers credibility in your business
If you need a business loan from a bank, an audit is usually required as audited financial statements demonstrate transparency and adherence to accounting standards. This enhances your credibility in the eyes of lenders, investors, and other stakeholders and can be a serious benefit of auditing.
A detailed independent audit from a reputable accounting firm instils confidence in your business’s financial health and management practices, making it easier to secure funding, attract investors, and establish trust with both customers and partners.
Paints a clear financial picture for C-suite to review
One of the significant benefits of auditing is that it provides a comprehensive and transparent financial picture for your company’s leadership to review. An audit consolidates all financial data into a clear, standardised format, making it easier for the C-suite to understand the company’s financial position. This way, senior executives can make informed strategic decisions based on accurate and up-to-date information.
Not only that, but it will lay the groundwork to make tax planning much easier. If your business needs a robust plan for year end tax planning, simply get in touch to enquire about our specialist tax services.
Tailored more specifically to your business
If you’ve avoided statutory audit thresholds it may be worth investing in an elective audit for the tailored financial insights it can deliver. Where a tax audit or statutory audit must conform to certain legal requirements and standards, one of the benefits of auditing electively is that it can then be tailored to meet the unique needs of your business. By working with experienced auditing accountants, you can design an audit that focuses on areas of particular concern or importance to your organisation.
How does undertaking an audit impact business as usual?
It’s natural to be concerned about whether the benefits might be outweighed by the distraction it causes your business. In particular, many business owners worry about the impact on staff providing necessary documents and answering any questions for the auditors.
Our attitude to this is simple: any auditing accountants worth their salt should make the process as seamless as possible. As experts in this area, we know exactly what we need from your team and work to ensure excellent communication. That way, the impact on your business is minimal.
Ready to reap the benefits of audits? Our specialist accountants can help
Do you meet audit thresholds and need to appoint auditing accountants? Or perhaps your business meets audit exemption criteria and you’re electing to commission an audit to reap the benefits? In either case, Williamson & Croft’s team of specialist auditing accountants can help. Simply get in touch to discuss your needs.
Contact our team of expert audit accountants at Williamson & Croft today.