Auditing is hands-down one of the most crucial responsibilities of the financial department of any business. The task gives credibility to the financial statements, thereby reinstating stakeholder confidence in a business.
While many choose to keep their audits within the company, getting assistance via an external auditor is an option worth considering. This is applicable for both well-established organizations as well as non-profit ones.
Here are the seven key reasons why you need audit assistance.
1. Effective legislative compliance
Depending on where you reside, certain government regulations in place require companies of a certain size to require external auditing. If such are the regulations in your country, you need audit assistance because there is no way out of it.
However, even if getting an external audit is not mandatory for your business, doing so ensures that your firm effectively complies with all financial regulations.
While employees hired by the company may overlook certain regulations or might not be well-versed in them, an independent reviewer will be impartial and knowledgeable, like the I & P Bindra Professional Corp.
2. Reflects a transparent brand image
Seeking audit assistance isn’t just a financial move. Instead, it can help in strengthening your brand as well. In today’s age, one of the key things consumers look for is transparency in brands. In fact, according to Emarsys, over 90 percent of consumers make their purchase decision based on company transparency!
Having external auditors on board illustrates to the outside world that your firm is not bothered by scrutiny and that you wish to employ and abide by the best standards possible.
This is especially relevant for firms that have nonrelated shareholders and investors. External auditors help establish trust with such silent investors about the operations of the business.
3. Better expertise
Unless you have enough funds to hire an in-house auditor with experience working in auditing firms, the expertise you get from external auditors is usually unparalleled.
This is because external auditors work with a wide variety of companies across various industries. And at every assignment, they have likely to encounter a different set of issues. Hence, they are well-versed in coming up with solutions to problems that may seem novel to you.
Not to mention that external auditors keep up with all the industry knowledge of auditing. This includes the latest trends, regulations, and software. Therefore, what may seem like a challenging task to you might not be perceived in the same way by a team of experts.
4. Prevents Fraud
Did you know that a whopping 30 percent of companies fail due to employee fraud? According to ACFE, Association of Certified Fraud Examiners, on average, companies lose five percent of their annual revenues due to such frauds!
While you may be of the view that you have hired the most trustworthy resources, the fact remains that you can never be too sure. And taking additional precautions never hurt. External auditors review all business records without any conflict of interest.
Hence, in case of fraud, the chances of being notified about erroneous statements are higher when you hire external assistance than when you work with an internal audit team.
5. Delivery of a comprehensive report
Apart from carrying out an extensive audit, external services also provide a comprehensive report to the business featuring the overview of the business processes and surety of whether the book of account has accurate information.
This audit report tends to simplify the company processes. This can help the management identify any bottlenecks or faulty processes that can then be fixed via taking remedial action.
The report also helps in getting an overview of how the different departments within a business work. This information comes in handy for the management when the firm is large and departments work autonomously.
Hence, business owners can review the reports and work closely with the external auditors to further improve their critical improvements. Such insights are usually missing in internal audits.
6. Helps with financing
According to Fundera, over 70 percent of small businesses currently have outstanding debt, while 56 percent of such firms seek financing for expanding their businesses, acquiring assets, or managing operations.
One of the most secure ways of business financing is applying for loans from banks. However, getting a loan is anything but easy! Apart from having a good credit score, you must also present your audited accounts to the bank at the time of application.
This is required to illustrate the financial position of a company. And audited accounts illustrate that all financial information shown has been corroborated by a third party. Hence, if you are looking for business financing, you will need audit assistance from firms.
7. Aid in training the internal team
Even if you don’t see your business seeking financing shortly, nor are you required by regulations to carry out a third-party audit, you can still benefit a lot from seeking audit assistance at least a few times during the early days of your business.
As mentioned above, such individuals have more extensive experience. By hiring them as consultants, you can train your internal team as well. By working with professionals, your internal team will gain an understanding of how to tackle unique situations. They will also pick up on the standard procedures used by professionals.
Hence, in time of need, they will be able to repost efficiently and quickly.
Now that you know why you need audit assistance from external auditors do your research and hire experts that can give your company the time and effort it needs during the auditing season.
There is a lot to gain from letting the experts take care of the technical elements while you and your team focus on boosting the revenue of your business.
Are there any other benefits you have realized from doing so for those who already seek audit assistance? Let us know!