An efficient financial audit is crucial for companies. Indeed, clear reporting can help investors, lenders or creditors make better decisions on regulation. Plus the audit helps get a better understanding of the health of the company for all concerned. However, the success of an audit depends on your preparation and how the process is undertaken. Below, we explore how to perfect it.
Planning the financial audit carefully is critical for success. There are two key strands to this. First of all, you need to understand the risk areas of the company that need auditing. Ensure that the auditors are aware of the areas of your company’s finances that need rigorous analysis. Secondly, you need to work out the method of collecting your data. The quality of analysis is defined by the quality of the data you gather – ensure that you put in place a method of accurate data collection. You can use API for financial data to keep your data as accurate as possible.
Review internal controls
For an audit to be successful, your company’s internal controls need to be performing optimally. If there’s an inefficiency it can be difficult to produce an accurate audit. Ensure that invoices, receipts and bank statements have all been processed and that the financial reports for the company are entirely up to date.
Compare external records
Once you’ve got a handle on the internal processes in the company, you’ll need to check on the external records. It’s vital that the reports sent to shareholders and other parties matches what you’ve recorded internally. Measure the internal and external records against each other to ensure that there’s consistency between the two.
Review accounting systems
For the auditing process to succeed you’ll also need to review the accounting systems. If the accounting system isn’t functioning, then it can be difficult to produce an accurate audit. Go through the accounting process step-by-step, checking for human error and searching for any mistakes – ideally at the end of this review you should be able to place confidence in your accounting systems.
To perfect the financial audit you’ll also need to consider risk assessment. Where are the financial risks inside the company? These will be the points where theft, fraud or data leaks might emerge from.
Perfecting your financial audit can be difficult. But by planning carefully, reviewing external and internal data and carrying out risk assessment you should be ideally placed to succeed.