Statutory audits: Powering integrity and transparency
19/07/2023
Juggling the competing priorities of your business isn’t easy. One day you’re focused on strategic planning, the next, you’re deep in budgeting and forecasting.
Amidst all of this, you might find the concept of a statutory audit less exciting than your latest product development or marketing campaign.
But, aside from ensuring you are complying with the necessary regulations, it can prove invaluable for your business’s integrity, transparency and credibility.
What is a statutory audit?
In essence, a statutory audit is an independent assessment of your company’s financial statements.
In the UK, larger businesses must have a statutory audit if they have:
- A turnover over £10.2 million
- Assets worth more than £5.1 million
- Over 50 employees
But if your business requires a statutory audit, it’s nothing to be afraid of.
The primary goal is to determine whether your company’s accounts accurately represent its financial position. This validation is undertaken by a qualified external auditor (a Responsible Individual).
At WMT, we believe that statutory or not, an audit should add value to your business and should be embraced by business owners.
Why should you embrace statutory audits?
An audit provides a unique opportunity to gain insight into your business’s processes which will:
- 1. Enhance credibility
Your stakeholders will want a clear picture of your business’s financial health and to know they can trust you.
When your financial statements are certified by a professional auditor, it inspires confidence in shareholders, investors, employees, and even potential business partners.
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Identify financial discrepancies
Keeping on top of everything in your business is challenging. But you don’t want errors, discrepancies, or potentially fraudulent activities to go unnoticed.
An audit will help to identify any issues and can save you from possible legal disputes, fines, or damage to your business’s reputation.
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Inform your decisions
With a reliable audit, you have a firm understanding of your company’s financial status, enabling more informed business decisions.
This can be pivotal in your long-term strategic planning.
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Streamlines processes
To make your processes more efficient, you need to know where you stand.
The audit process often identifies areas in your financial processes that could benefit from further efficiency or control measures.
Summary
So, it’s high time we change our perspective and regard statutory audits as a friend rather than a foe.
Audit can be used as a catalyst for process improvements, which optimise your business operations and foster integrity, transparency, and success in your business endeavours.
In our next blog, we will discuss how a voluntary audit can shape your business decisions.
In need of an auditor who goes beyond compliance? Contact us.
