When you are running a business, you have to keep your eye out for a lot of things. From the product development and design to manufacturing and marketing, you have to remain on top of all aspects of your business. The financial aspects of a business are arguably the most crucial part of a business. While working on developing your business, there is a chance that something or the other might slip under the radar and go unnoticed. A slight error or anomaly can hurt your business later on when an external audit takes place. This is where the need for an internal audit emerges. It is like a preparatory test of a company or business before the actual examination. So, should you conduct an internal audit? Let’s discuss the benefits of this exercise to ascertain the answer.
Points out the Mistakes Being Made
The primary reason for any kind of an audit is to check if there are any mistakes being made that aren’t being ironed out by the management. Are there any policies or organizational operations that aren’t being followed? An internal audit does the same thing without holding anyone accountable for their mistakes. It just points out the mistakes since the audit is being conducted by employees of the same company and not by an outside agency. Even if the internal audit is outsourced to a third-party, its objective is to identify mistakes and make you aware of them, not hand out punishments.
Identifies Areas of Improvement
Another benefit an internal audit provides is alerting management the areas that need improvement within the organisational structure of the company. It is similar to a risk assessment. It may also help you identify potential problems that may surface by the time an external tax audit rolls around. Thus, it gives the management the chance to improve those areas and deal with the redundancies within the organizational process.
These are just some of the benefits of an internal audit. Overall, they help a business adequately determine organisational structures within the business. No matter how small or big your company is, conducting an internal audit is always beneficial.
Shoebox Bookkeeping is a provider of online bookkeeping services to the companies and business in Australia. If you want to learn more about internal audits or want us to do the bookkeeping for your business then give us a call today.
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