The modern internal audit process has been around for less than 100 years, yet the myths and mysteries around this rather standardised process are things of legends – especially when many of them are simply untrue. From thinking that Auditors are there to nit-pick and find fault, through to the belief that a business should just offer the information being asked for, bad practice has evolved – leading the entire auditing process to be more uncomfortable and unnecessarily tedious than it needs to be.
Working in partnership with a number of business – both clients and auditing firms, we’ve seen the classic traits of how *not* to endure an internal audit. And if you’re a business getting ready for your first internal audit, then we’ve gathered together a few of the top tips that auditors look for when they conduct an internal audit on your business.
Internal Business Control Systems
One of the key things that auditors look for are signs that the business is (or isn’t) running efficiently. Specifically looking at internal controls and handover between business functions, they want to know whether the data you’re reporting is reliable (whether it’s operational or financial), they want to be able to test the efficiency and effectiveness of operations, they want to ensure that you have the necessary processes and checkpoints in place to protect and safeguard the business’ assets and they want to ensure that you are compliant with all applicable laws and regulations.
Simplicity & Accessibility
Auditing teams want to see that the business they’re auditing has “comprehensive, thoroughly documented, and easily accessible bookkeeping records as an indication of how organised your accounting department is”, says The Mighty Recruiter. The more transparent you are, the easier the process, and the better the result – for all involved.
Quite often, CFPro has been called in (by both customer and Auditor) to help facilitate this process a lot more – whether it be to digitise historical records, or bring consistency throughout financial reporting processes in businesses with functions all over the world – getting your accounting records into a format which is easy to access, and most important, transparent, is a key to flying through the auditing process.
The auditing process is there to check and confirm that businesses are reporting their business’ income on their income tax returns, as they should be. It’s the fundamental reason why the auditing process was set up. This includes the way you report on your cash assets, property or material assets, services that have been received by the business, the way you pay your teams, your employment benefit schemes and more. Remember that if your business appears to be doing better than what the numbers are showing, this may be look suspicious to an auditor. Your spending should fit into the picture of revenue you report – and any exceptions to this, may be marked as red flag for further inquiry. Are there any business expenses which appear so extravagant for the type of business you run? Remember that an internal auditor is entitled to see both your business and personal records.
CFPro works in partnership with client businesses, and 3rd party service providers such as auditors, legal teams, other finance teams, funders and investors, to deliver the best tactical and strategic financial and business growth results, at an affordable cost that enables growth. We become part of your team and bring a collective hive network of experience that enables you for long-term success. We pride ourselves on not being typical – simply because we’re more than box-checkers. We’re geared to enable your growth – and to help you get there.
Call us today.