How many companies are leveraging audit to gain more value for their business? Besides ensuring compliance with ASIC, a business stands to gain a number of benefits from an independent audit of its financial statements.
These include:
Reliable financial data
For an organisation to prosper, it is essential that reliable financial information and sound corporate governance are in place. An audit helps protect the interests of stakeholders and provides key decision makers and directors with the confidence that the financial information they are using for business decisions is accurate and complies with the relevant accounting framework.
Internal control improvements
Auditors can provide management with recommendations for improving any potential weaknesses in financial controls identified during the audit. If properly implemented by management, these recommendations can lead to a stronger controlled financial structure that reduces the opportunities for fraud and error.
Productivity gains
In the course of an audit, auditors may report to directors and management on findings associated with structural or operational deficiencies and make recommendations on improvements to internal procedures and processes. These recommendations can result in improved efficiency, productivity, additional revenue, and cost avoidance or reductions.
Industry insights
Businesses are able to access the knowledge and expertise of auditors who have significant experience with a wide range of companies and who have seen businesses facing similar issues. If your auditors work with other European subsidiaries, they are often able to provide insights into best practices based on their experience with audits in your industry.
Tax compliance
An audit provides assurance that major tax risks are identified and brought to managements’ attention. It will minimise the likelihood of filing inappropriate tax returns that could result in unnecessary tax penalties and interest.
Transparency for investors
Audited financial statements prepared in compliance with accounting standards provide transparency to investors, suppliers and financial institutions on a company’s financial position, and the results of its operations and cash flows. Businesses that have not been subject to external audits may be perceived by financiers as having higher default risk, hence restrict their access to credit which may impede expansion. For those considering introducing financial partners or selling their business, the availability of audited financial statements will assist with the due diligence process in any potential transaction.
Platform for expansion
An audit provides a platform, both financial and non-financial, for businesses to meet future challenges as they grow and develop into more complex organisations. An independent assessment by qualified professionals of an entity’s accounting and internal control systems will prevent unforeseen problems, particularly if the business is expanding rapidly or a candidate for listing.
With the right auditor, companies can leverage an audit to deliver tangible business benefits. For many fast growing companies, a voluntary audit may be an investment worth making. If you would like to find out more about how audit can add value to your business, please contact Michael Kersch, Accru Felsers on 8226 1655 or mkersch@accrusyd.com.au.
