Despite the benefits associated with conducting a statutory audit, some businesses and organisations that are required to undertake statutory audits often do so reluctantly. However, commissioning a statutory audit can not only ensure organisations are fulfilling regulatory requirements but can be extremely valuable to the business in question. Rather than being used to merely satisfy compliance requirements many companies use the findings from a statutory audit to enact changes to business processes which enable them to operate more competitively and more successfully. Although statutory audits are a legal requirement for some organisations, many businesses that are not legally required to undergo an audit are now opting to do so because of the benefits exemplified by companies succumbing to.
In order to provide value to the business, it’s essential that companies engage specialists who are experienced in undertaking a statutory or business audit for organisations within the same sector or industry. By truly understanding the business, auditors will carry out specific assessments and analytical reviews as part of the statutory audit. This technical understanding and insight into the business enables them to access crucial data which gives an insight into business processes and procedures and the functioning of the business as a whole.
Although many organisations are required to undergo a statutory audit, the nature of it may vary depending on the size of the business or the industry in which it operates in. For example, many industries are subject to regulations which are specific to their sector. This exemplifies the necessity of engaging a team of auditors who are experienced in conducting statutory audits within your industry. In addition to understanding the key areas of your business, they will be aware of upcoming regulatory changes and how these may affect your business. They can offer advice regarding how potential statutory changes may impact upon the business and also suggest a range of possible actions the business may implement in order to prepare for additional compliance requirements.
Similarly, experienced audit companies will recognise the varying needs of different businesses. Smaller, owner managed businesses are likely to face different issues than larger corporate companies or international firms and will, therefore, require alternative analysis and assessments. By taking into account the business in question and modifying techniques accordingly, auditors ensure that companies gain value from the statutory audit in addition to fulfilling their legal obligations.
By submitting to a statutory audit businesses can identify potential procedural weaknesses and enact change prior to suffering financial difficulty or organisational failure. This is crucial to maintain public and stakeholder confidence in the business as well as enabling the business to operate with minimal losses. Although not all companies are required to undertake statutory audits, the benefit gained from commissioning one can be of such value that an increasing number of organisations are now committing to voluntary audits in order to benefit from the auditing process. By identifying potential risk and procedural deficiencies before they cause damage to the functioning of the business, organisations can reduce risk, cut costs, increase efficiency and maximise revenue thus safeguarding their future.
Baker Tilly is an independent firm of chartered accountants and business advisers, positioned as one of the leading mid-tier accountancy firms. One of Baker Tilly’s areas of expertise is in Statutory Audit solutions to corporate organisations. For more information, please visit: http://www.bakertilly.co.uk/services/audit/statutory-audit.aspx