Our audit client base divides into those companies who are required to have an audit and those who choose to. Whichever group your company falls into, we believe that our role is to ‘add value’ during the audit.
For those clients who choose to have an audit, entrepreneurs do so for strong commercial reasons.
Providers of finance (such as banks) will look for the comfort of an unqualified audit report in assessing risk. Indeed, banks may require an audit, irrespective of any legal exemption. An audit will be helpful if you are looking for new sources of finance including hire purchase, factoring or invoice discounting. Without audited accounts, you may find yourself subject to higher rates of interest or the need to provide personal guarantees to the lender.
Suppliers also base credit decisions on advice obtained from credit reference agencies who may well downgrade credit ratings for companies unable to provide audited accounts, particularly where they were audited previously.
Should you consider selling your business, the availability of audited accounts will help to provide an independently verified financial track record of the company. Growing companies too may find that audited accounts prove invaluable. Rapidly expanding operations often find it difficult to monitor and check the systems and procedures they need to properly control the business. An audit provides a unique insight into the control exercised by management and, at the same time, provides an opportunity for the auditor to add value about this and other aspects of the business.
Fraud is not something any of us like to consider as being possible in our own company, but sadly, it is increasingly common. Whilst an audit is no guarantee against fraud, without one it is even harder to detect, particularly where there may have been collusion at a relatively senior level. Of course, the very fact that a company’s accounts are audited serves as a strong deterrent in the first place.
We also believe that those commercial benefits outlined above should be available to those businesses that require an audit as well. We therefore structure our audit processes to add value, and not just to provide a report.