The Key Things You Need to Know About Company AuditsPublished Friday, 11th June 2021
As your company expands and generates more revenue, there will come a time when regular audits or assurance reviews are necessary. Most people think of audits as a group of HMRC employees randomly showing up at the door ready to look through invoices and receipts. However, that’s certainly not the case. While there is such a thing as random checks from the HMRC, we’re here to discuss independent audits that exist to boost the credibility of your business.
In case you’re still uncertain, an audit is an independent examination and evaluation of your company’s financial records. The goal is to validate the company’s finances by making sure the records accurately represent all business transactions. Auditors evaluate where money is coming from and where it’s going. They are also concerned with the financial processes and systems which are in place within the organisation.
The bigger the organisation, the more accounts there are to check
For this reason, audits are a mandatory requirement for companies that meet 2 or more of the following criteria.
- The company has an annual turnover of more than £10.2 million
- The company’s assets are worth more than £5.1 million
- The company generally has more than 50 employees
However, even companies that don’t meet these requirements often choose to undergo an audit. It helps to build credibility with investors, banks and key stakeholders. In addition, audits provide constructive feedback on how well the company is performing, allowing relevant parties to brainstorm ways in which the business could grow and improve.
The key benefits of a company audit include:
- Receiving a detailed overview of company operations and finances.
- Obtaining an alternative perspective on company operations that might greatly differ from your own.
- Improving your credit rating by placing your business in a low-risk category.
- Becoming more reliable by creating assurance that everything is going well within your business.
- Devising an efficient business plan using the audit report.
- Promoting accountability within your company.
In summary, the auditing process entails an experienced team conducting thorough research about the company, reviewing financial documents, and confirming the company’s position. The audit will point out any happenings in the company that might be overlooked by internal systems and processes. The audit also serves the purpose of making sure that the company’s financial standing reflects what is known to the general public or relevant stakeholders.
Issuing an official audit report
Once the auditing process is complete, an official audit report is issued. If there aren’t any major issues or concerns, the report is deemed as unqualified.
At the end of the day, all companies should be striving for assurance. This means that the companies financial documents, and in some cases other business operations, have been thoroughly reviewed. More so, you’ll be in a position to grow the company even further without any concerns that something will go wrong.
Sounds good, right?
If you’d like to find out more or explore our audit services further, please get in touch and a member of our specialist team will be more than happy to help.
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