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

Teachers swap whiteboards for workplace visits on ground-breaking scheme  Jayne Rear Cabinet Member For Education And Skills 2rd From Right And Ash Sutcliffe 3nd From Right Pictured With Representatives From Blackburn College The Heights In Burnley

Teachers swap whiteboards for workplace visits on ground-breaking scheme

21 Feb 2025

2

Historic Haslingden X-ray equipment firm targets global markets following NPIF II funding David Wright, My Ha Hoang, Paul Dixon, Deby Fisher

Historic Haslingden X-ray equipment firm targets global markets following NPIF II funding

21 Feb 2025

3

Nick Park unveils statue of Feathers McGraw at Animate, Preston Nick Park CBE & Mayor of Preston Councillor Phil Crowe unveil the statue of Feathers McGraw.

Nick Park unveils statue of Feathers McGraw at Animate, Preston

20 Feb 2025

4

Middle Eastern ‘aura’ for Lakeland as it completes high-profile Dubai hotel project Lakeland Aura team

Middle Eastern ‘aura’ for Lakeland as it completes high-profile Dubai hotel project

20 Feb 2025

5

Speakers revealed for Convention of the North 2025 in Preston Convention of the North

Speakers revealed for Convention of the North 2025 in Preston

20 Feb 2025

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
Skills Bootcamp in Procurement - Cohort 3
Blue-Modern-Land-Travel-Youtube-Thumbnail-2-1024x576.png.png
LBV Hub Awards
14 Jan 2025 - 18 Mar 2025

Skills Bootcamp in Procurement - Cohort 3

Community & Business Partners CIC, Blackburn, BB2 3UA

09:30 - 13:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

Women's Health champion training
Supporting Women's Health in Your Teams A Path to Success-6.png.png
LBV Hub Webinar
26 Feb 2025 - 26 Feb 2025

Women's Health champion training

*, Online, *

10:00 - 16:00

Level 3 Emergency First Aid at Work Course - In Person
RKMS ACADEMY LOGO - BLACK AND ORANGE.png.png
LBV Hub Webinar
26 Feb 2025 - 26 Feb 2025

Level 3 Emergency First Aid at Work Course - In Person

RKMS Group , Blackpool, FY42DP

09:30 - 17:00

Employment Law, Tax and Payroll Update - East Lancashire
PM and M event
LBV Hub Seminars
26 Feb 2025 - 26 Feb 2025

Employment Law, Tax and Payroll Update - East Lancashire

Accrington Stanley Football Club, Accrington, BB5 5BX

08:00 - 10:00

Preston Freelancer Meet-Up: February
Freelancer Meet-Up Feb.png.png
LBV Hub Networking
26 Feb 2025 - 26 Feb 2025

Preston Freelancer Meet-Up: February

Society1 Coworking Space, Preston, PR1 3LT

10:00 - 11:30

Better People Management Workshop
Business Breakfast.jpg.jpg
LBV Hub Seminars
26 Feb 2025 - 26 Feb 2025

Better People Management Workshop

The Jimmy Arnfield Suite Lancashire Football Association, The County Ground, Thurston Road, Leyland, PR25 2LF

10:00 - 15:30

StackedX with PM+M and CFO Techstack
LBV Hub Seminars
27 Feb 2025 - 27 Feb 2025

StackedX with PM+M and CFO Techstack

Red Hall Hotel, Bury, BL9 5NA

08:00 - 10:00

Better People Management Workshop
LBV Hub Seminars
27 Feb 2025 - 27 Feb 2025

Better People Management Workshop

Pendle Town Hall, Market Street, Nelson, BB9 7LJ

10:00 - 15:30

Kickstart Networking - Crazy Golf at Level, Preston
Kickstart Crazy Golf.png.png
LBV Hub Networking
27 Feb 2025 - 27 Feb 2025

Kickstart Networking - Crazy Golf at Level, Preston

Level, Preston, PR1 1HT

16:00 - 18:00

Post Employee Ownership Trust: What's the story?
LBV image.jpg.jpg
LBV Hub Seminars
04 Mar 2025 - 04 Mar 2025

Post Employee Ownership Trust: What's the story?

Brabners, Preston, PR5 6AW

11:00 - 12:30

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 LBV120 Online Graphic 1
Subscribe now

Weekly news bulletin