Audits are an important task that many companies neglect. Business audits are based on an analysis or evaluation of a company, in order to know the real, current business situation. The auditor is responsible for collecting all the information to come to a final judgement, and the outcomes can be favourable or unfavourable. After analysing all the data, the audit report is created, where the most important data is collected. Large companies must conduct their own internal audits on a regular basis, but even smaller businesses should consider these auditing checks. This ensures everything is in order, and can prepare the company for a potential HMRC audit.
Business audits are an in-depth examination of a company and serve to know the situation of a business. In order to know the real situation of a company, different types of audits are carried out and consist of a thorough evaluation to determine the state of the business. The decision-making process is streamlined thanks to the results provided in the audit report, which are obtained after the analysis. The audits are classified according to the area of study that is carried out, and are categorised as accounting, operational, or Human Resources audits. The person in charge of auditing the business is also taken into account.
Here at Norden’s we’re experts in just how to audit companies in a way that lends credibility and conveys confidence in your business. Carrying out an audit on your company can seem like a daunting task, but we are here to help. We can advise you on what to do if you are audited and exactly what information you need to supply if you are. We can put you in a better position going forward, as our team will help you to have a much clearer understanding of what exactly your current situation is and can give you the confidence you need to make the best decisions for your business’s future.
Nordens provide an effective audit service as a continual improvement led process.
Our experts can highlight your financial strengths and challenges, and identify how and where the business can improve.
Highly Efficient Auditing
Minimal Business Disruption
Reduces Corporate Risk
Secures Peace of Mind
Here at Nordens, we understand that you want to know more about Business Auditing. To keep you well-informed, here’s a list of our most frequently asked questions.
On many occasions, companies do not sufficiently value the need and importance of conducting audits in business organisations. This is because auditing allows you to study what you are doing, to know if you are doing things well, and to consider if you are complying with legal regulations. But most importantly, it allows you to assess where you stand with current trends in the industry and to make decisions regarding your future. It is key for the management of the company, to have reliable information that allows you to analyse and evaluate the steps to follow.
In addition, the control of our business management can help us avoid more than one headache in reference to legal aspects. Sometimes, we can make mistakes that can be considered fraud, which can lead to penalties and fines. For example: if our accounts do not reflect the reality of the company, if our computers do not have the necessary licenses to be used, or if our machinery does not comply with the regulations, we may have problems with the law.
The objectives of an audit focus on knowing in detail all aspects that make up a company process. But, as indicated above, you can also refer to specific aspects of the company to assess how they are developing.
Thus, the objectives of an audit include:
• Identifying the current and exact situation of the company
• Granting credibility and confidence to the company in front of possible investors or banking entities
• Discovering fraud that the company may be knowingly – or unknowingly – committing
• Taking note of technical errors that are taking place
• Reviewing the legality of all products and activities of the company
• Assessing if the Work System of the company is effective and efficient
• Collecting as much information as possible that will allow us to make better decisions that will improve the company’s performance and productivity
Auditing ascertains how accurate your accounting is, based on the findings of the auditors. If you keep your business accounts up-to-date – and use an accountant like Nordens – then there should not be anything to worry about. It is about comparing the aspects that make up the company with national or international laws, as well as with the internal rules of the company, to see the deviations that are taking place and correct them. Therefore, an audit will allow the company to take more control of itself, as well as help detect failures. Also, the audit will allow you to know the real state of the company in general to improve business management. In short, an audit is an examination and control of the economic situation of the company. It allows you to consider a more appropriate strategy to the one that might not be providing the results you expect, and translate it into a financial plan.
Many companies do not think about audits. They either think it will never happen to them, or do not give them enough importance as an internal practise. However, we believe that conducting an audit will allow you to analyse and assess the steps to follow in the growth and development of your business activity. In short, an audit is conducted to test whether a company complies with its obligations, has an up-to-date status of its annual accounts, and deduce how the company exploits its full potential in its daily exercise. How you analyse an audit will allow you to study what is being done in the company, both the good and the bad. In this way, you can correct or stop what can generate problems in the future.
Small companies, in general, are not required to perform audits. However, it may be necessary to perform an audit when there is evidence of excessive spending, customer complaints, non-compliance of projects, excessive rotation of human resources, or when the results are not what were expected. To be exempt from an audit, a company must be ‘small’, or have been passed as such in the last year and be serving that year’s grace.
To identify whether a company qualifies as small, two of the following criteria should be achieved:
• A turnover of under £10.2million
• Gross assets under £5.1 million
• Less than 50 employees
• The business mustn’t reach eligibility at any point of the year (this includes PLCs, banking and insurance companies, etc.)
• The business cannot be joined to a group of businesses that don’t qualify
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