Why is a financial audit necessary for my organization?

There is a lot that comes with running your own business, including a high pile of administration. If these records are not kept up to date, you will quickly get behind and this can have major consequences. After all, it is not the intention that you are fined or even have to explain in court why certain issues were not dealt with. In the beginning, the administration might be easier to keep up with, but as soon as the company gets bigger, things can be overlooked. At that point, an audit firm could help you. They will take the work away from you and ensure that the company’s financial figures are accurately analysed and reported. In this blog, I will tell you more about what an audit is, what the benefits are and whether an audit is necessarily required.

What is an audit?

But what exactly is an audit? There are different types of audits, such as an internal audit and an external audit. Both come down to the same thing, only with the internal audit the company itself ensures that the administration is examined and that everything is accurately reported. With an external audit, an external company does this for you. They look at it from a different angle, so that all financial administration complies with the regulations and laws. They provide an independent opinion on the documents. 

The benefits of a financial audit

Not only does a financial audit provide a clear overview of the administration, it also creates a basis for new decisions for the future. After all, an audit provides insight into the financial situation of a company. Based on those accurate results, you can make decisions for the future. For example, are you going to invest more or are you going to operate in another country? These are questions you can ask once the financial audit has been made and approved. In addition, an audit can also help to win tenders, because it gives a clear overview of the financials. This gives a government agency more confidence that you have things in order and therefore the offer becomes more attractive.

Is an audit required?

Not all companies are required to have a financial audit. Nevertheless, most businesses like to have their financial records in order. Perhaps you will be called upon in the future to present the figures for the past few years. It is then a disappointment if these have not been clearly analysed and reported. Retrieving the correct figures will then take a lot of time. There is also a good chance that the figures are not accurate. 

Learning more about financial audits

You may be familiar with financial auditing and assurance. Perhaps you have an education in this field or you already have work experience. In this industry, you often hear of students taking the ACCA programme. This is an intensive training that provides additional work experience and knowledge. During this programme, you will write about 13 papers, which are divided into four sections. You can follow this programme at an ACCA Audit firm. They will provide you with all the support you need and you will learn from different cases.