1.11.2022 | Tax

What are the benefits of having an audit?

Although the audit is a statutory requirement for many businesses, sometimes the benefits received can be overlooked, but there are, in fact, lots. 

Here, the Head of Audit Compliance at BG Audit, Nick Marshall, gives an insight into some of the gains.

Identifies weaknesses in systems and controls

Part of the auditors’ routine work involves the assessment of accounting and internal control systems. It is common for auditors to report to directors on weaknesses in the financial controls of the business and recommend improvements.

Minimises exposure to fraud

 The identification of weaknesses in the financial controls of the business may also assist with mitigating the risk of fraud. In addition, the knowledge of an audit being undertaken can itself act as a deterrent in some circumstances.

Improves compliance

Your auditor’s collective knowledge and expertise will ensure your financial reporting is robust. Financial compliance is a professional speciality, and not all business owners have the correct set of knowledge or the time to ensure their business is always up to date with the latest regulations – which can and do change.

The audit process sometimes unearths adjustments that are significant for tax purposes, and without an audit, tax compliance for many companies would be significantly more difficult than it is at present.

Gives credibility

Without credible, high-quality financial information, decision-making by directors and investors is both difficult and unsafe. Both institutional and private investors are increasingly active and critical of poor-quality information. Thanks to the internet, financial information is available to a wider audience than ever before. It is important that such information is of the highest possible quality. Employees, customers, suppliers and many others are increasingly willing and able to voice their dissatisfaction where information lacks credibility. The audit helps smooth the wheels of investor, customer, supplier and employee relations.

Good corporate citizenship

Reputational risk is now recognised as a major risk facing larger companies.  A good reputation is important for businesses of all sizes, and audit investment is recognised as an essential element of good corporate governance in the UK and internationally.

Gives clear vision for growth

An audit can be a hugely positive and beneficial process for your business. It’s a health check and will result in a clear picture of how your business is performing, giving you the tools to fix problems and a clear vision of your strengths in the marketplace, empowering you to seize opportunities and continue to grow.

For more information on the process and benefits of an audit or to discuss your audit requirements, please contact Beatons e: info@beatons.co.uk t: 01473 659777.