It is standard for government entities and public companies to undergo statutory auditing. Primarily, this involves the in-depth evaluation of the financial records and standings of these bodies and organizations. Unfortunately, this crucial process has earned a bad name, as many people consider it a tedious and stressful experience.
Is auditing a business a necessity?
Audits have similar impacts as visiting your dentist for that regular check-up. When visiting the dentist, you get to know the state of your oral health and gain confidence in showing off that bright smile. Similarly, in any business, you are never assured of its actual state and condition until you run audits. Thus, if an organization wants to do more than look healthy on the surface, audits are a necessity.
Is auditing all about finances?
At the mention of audits, all thoughts are geared towards finances. While this is a core area of interest when conducting a business health check, there is more in auditing. This is because beyond examining accounting processes, audits check internal systems and controls.
For any business, this makes auditing a powerful X-ray machine that makes known the body’s structure. Armed with such information, it becomes easier to take action by rectifying all weak points.
How to ace those audits
The proven formula for making auditing less stressful is proper planning and preparation. This is why SOC 2 preparation for organizations that handle third-party data must be handled with utmost professionalism. For the avoidance of errors and complications, this process is best guided by a certified third-party auditor.
Why are audits good for your business?
- Audits provide unquestionable credibility.
It is no secret that customers, shareholders, and potential investors all value transparency. So, attaining a reputation in the marketplace is vital for every business that wants to be an industry leader. One of the effective channels of achieving this is through regular audits. This is because this invaluable process confirms the state of the organization to these all-important parties.
- Audits detect and prevent business fraud.
Every enterprise loses long-term value if it fails to invest in secured business processes. This is because, whereas employees are expected to be loyal, they will misuse loopholes within the operational systems. A practical solution to preventing workplace fraud is through audits since they reveal weak links that could be exploited.
- Audits help improve operational efficiency.
While audits are great for enhancing consumer and investor confidence, its number-one beneficiary is the business. It takes an evaluation of the internal systems and controls to reveal all the moving pieces in the organization. By revealing the skeleton of an enterprise, it becomes easier to improve on the inefficiencies
- Audits prove compliance.
Every business is under the control of its industry’s regulations and compliance standards. Still, adhering to these regulatory standards is demanding, given the complexities of these requirements. However, audits draw a clear line showing your current position and where you should be. This then gives you a better platform for moving forward and meeting these standards.
The secret to running any business is not remaining on the right track, but continuously moving forward. Thus, staying comfortable by avoiding audits is never the way to run any business. Most importantly, time and market performance have proven that insights from audits are invaluable to every enterprise.