For any business owner spinning an endless array of plates, the idea of an audit is unlikely to inspire enthusiasm. Their reputation – time-consuming, expensive, obligatory – does them no favours, but the reality of audit is more nuanced and more useful.
Done right, an audit is more than just a regulatory must-do; it’s an opportunity to strengthen your business, build trust with stakeholders, and gain insights that can lead to better decision-making.
Here we’ll look through how audits really work and how you can make them work for you.
What is the point of an audit?
At its heart, an audit is about ensuring that your business is on solid ground. It’s a way to confirm that your financial records are accurate and that your business is complying with all relevant laws and regulations.
By examining the processes behind your finance and operations, it provides a clear picture of where your business stands. But an audit is more than just about ticking boxes. It’s about building trust—both within your team and with those who rely on your business, such as investors, customers, and partners.
As James Liptrott, Haines Watts East Midlands Director puts it, "transparency and accountability are more than just buzzwords; they’re the foundation of trust between a company and its stakeholders". This trust is vital because it can strengthen your relationships and provide a solid foundation for growth.
What are the benefits of an audit?
Given that statutory audits are, by their nature, an externally mandated affair, many owners wonder what they can do for them – especially if you’ve never gone through the process before or if previous audits felt more like a chore than a benefit. However, when approached with the right mindset, an audit can be a game-changer for your business. Here’s how:
- Objective Insight: As a business owner, you’re deeply involved in every aspect of your operations, which can make it difficult to see things objectively. This is where an external audit becomes invaluable. Auditors provide an unbiased view of your financial health, identifying any discrepancies and offering practical recommendations. This fresh perspective can reveal issues that might have been overlooked internally.
- Enhanced Credibility: Trust is the currency of business. An external audit report isn’t just a document; it’s a powerful statement that your business is committed to transparency and good governance. This can significantly boost your credibility with stakeholders, including investors, customers, and lenders, helping you secure the resources you need to grow.
- Risk Management: Every business faces risks, but knowing where those risks lie can be hard. An audit can help you identify vulnerabilities in your financial processes, enabling you to address these risks before they become costly problems.
- Compliance Assurance: Staying compliant with ever-changing regulations can be stressful. Even if an audit isn’t legally required, adhering to audit standards shows your commitment to best practices and prepares your company for any future regulatory changes. This can be a significant relief, knowing that your business is protected from potential legal issues.
- Continuous Improvement: Running a business involves constant learning and adapting. The insights gained from an audit can drive continuous improvement, helping you refine your financial processes, increase efficiency, and boost profitability. This ongoing evolution is crucial for long-term success.
What can you do to make an audit successful?
Despite being based on a set process, audits depend a lot on the engagement and energy of those involved.
Preparing for an audit might feel like just one more thing on your already packed to-do list. But with the right approach, it can be a smooth and even beneficial process. Here are some steps you can take to ensure that your audit goes as smoothly as possible:
- Choose the Right Audit Partner: The right auditor can make all the difference. You want someone who understands your business, not just in terms of numbers, but also the challenges and opportunities unique to your industry. This connection will ensure the audit is not just a routine check but a meaningful process that adds real value.
- Prepare Thoroughly: Think of the audit as an opportunity to showcase how well your business is managed. Make sure all your financial records and documentation are up to date and easily accessible. This might seem like a lot of work upfront, but being organised will reduce stress and make the audit process quicker and more efficient.
- Engage with the Auditors: Auditors aren’t there to judge—they’re there to help. Engage with them openly, provide the information they need, and don’t hesitate to ask questions. This collaboration can lead to deeper insights and help you see your business from a new perspective.
- Address Issues Proactively: If the audit reveals any areas that need improvement, don’t be discouraged. View this as an opportunity to strengthen your business. Address these issues promptly to prevent them from escalating into bigger problems down the line.
What to do with the information from an audit
Once the audit is completed, it’s time to put the findings to work. The insights you gain can guide your business decisions and help you move forward with confidence.
- Implement Recommendations: The recommendations from your auditors are not just suggestions—they’re actionable steps that can enhance your business. Implementing these changes promptly can lead to better financial management and operational efficiency.
- Communicate Findings: Sharing the audit findings with your team and stakeholders is a powerful way to build trust. Being transparent about both the strengths and areas for improvement shows that you are committed to doing what’s best for your business.
- Review and Revise Processes: Use the audit as an opportunity to take a step back and evaluate your internal processes. Maybe it’s time to update your financial controls, improve your documentation practices, or even invest in new technology. These improvements will pay off in the long run.
- Plan for the Future: The audit can provide a clear roadmap for the future. Whether you’re considering expanding, cutting costs, or exploring new markets, the insights from the audit will help you make informed decisions.
How to choose the right audit partner
The relationship with your audit partner is a crucial one. As Alberto DiLorenzo, Audit Partner as Haines Watts Bedford explains: “A good auditor will not just go through the motions but will actively look at where weaknesses can arise and make recommendations on how to implement systems and controls to ensure the business is robust.
Choosing the right partner means finding someone who is not just a service provider, but a trusted advisor.
- Industry Expertise: Ensure the audit firm you choose has experience in your industry. This will allow them to provide relevant insights and identify industry-specific risks that could impact your business.
- Reputation and Credibility: Trust is built on reputation. Look for an auditor with a solid track record of reliability and quality service. Checking references and reviews can give you confidence that you’re making the right choice.
- Communication Skills: Your auditor should be able to explain complex financial information in a way that’s clear and understandable. This is especially important if you don’t have a financial background.
- Value for Money: While cost is an important consideration, it shouldn’t be the only factor. Compare quotes from different firms, but also weigh the quality of service and the potential benefits of the audit.
Why choose Haines Watts for your next audit
Choosing the right audit partner can make all the difference in the success of your business. At Haines Watts, our team brings deep industry knowledge, a commitment to transparency, and a personalised approach to every audit we conduct, based on years of experience.
Our goal is to work closely with you to understand your unique challenges and opportunities and make sure you have the information and support you need to succeed. We go beyond the numbers, offering tailored recommendations that can enhance your financial processes, mitigate risks, and position your business for long-term success.
If you’ve got an audit on the horizon, get in touch to see how we can help.
