Did you know that the worldwide financial auditing services market was recently valued at $109.21 billion?
This is because financial audits can be confusing and time-consuming when doing them yourself.
Performing a financial audit is critical for businesses to maintain compliance with financial regulations. However, many business owners find the process daunting and time-consuming.
But don’t worry. Keep reading because this guide breaks down the process into easy steps that will help you understand what’s required of your business and how to complete an audit quickly and easily.
What Is a Financial Audit?
A financial audit is an examination of your company’s financial statements and records. It’s typically performed by an outside accountant or accounting firm. The purpose of a financial audit is to give you an objective opinion on the state of your finances and to identify any areas where improvements could be made.
How to Conduct a Financial Audit?
There are two main types of financial audits: operational and compliance. Operational audits focus on the efficiency and effectiveness of your company’s internal controls, while compliance audits focus on whether your company is following applicable laws and regulations.
Here’s a brief guide to conducting a financial audit:
1. Choose an Auditor
The first step is to choose an auditor. If you’re using an accounting firm, make sure they have experience with small businesses. You’ll also want to ask for references from other businesses.
2. Gather Your Financial Statements and Records
The auditor will need to see your financial statements and records, including bank statements, tax returns, and invoices. Make sure you have all of these documents organized and easily accessible.
3. Meet With the Auditor
Once you’ve gathered all of the necessary documentation, you’ll meet with the auditor to discuss the scope of the audit. The auditor will then perform a risk assessment to determine which areas of your finances are most vulnerable to fraud or error.
4. Review the Findings
After the audit is complete, you’ll receive a report detailing the auditor’s findings. Take some time to review the report and make sure you understand everything that is being said. If there are any areas of concern, be sure to follow up with the auditor to get clarification.
You can have a look at more information here.
5. Implement Changes
Based on the findings of the audit, you may need to make some changes to your financial procedures. Be sure to implement these changes as quickly as possible to help improve the overall financial health of your business.
Make Performing a Financial Audit Simple
A financial audit is an important step in ensuring your business is compliant with regulations and laws. By following the simple steps in this guide, you can make sure that your business is on track for a successful future.
To learn more about financial audits and other helpful tips for small businesses, check out our blog. We have tons of resources to help you get started on the right foot!