An Audit is simply an objective inspection of an organization’s financial accounts or statements. This is done to make sure that the records are in accordance with the set legal requirements. An audit can either be internal or external.
An organization may opt for an internal or external audit based on its needs. An internal auditing team comprises of employees who work in the company. The external audit however, is the most beneficial to an organization. It includes giving an auditing firm the mandate to check on the financial records and control systems of the company. Auditing firms then give the client feedback which the company uses to better the system and control processes.
Internal audits are more regular and they help the employees to stay on top of their game. External audits on the other hand are more independent and unbiased. They paint the true picture of things on the ground. The special insight provided by the auditor is used to make the company more competitive by helping them realize the loopholes. Take it as a regular health checkup, it helps you keep fit and healthy. You are able to diagnose any life threatening diseases before they take you down. Unlike popular belief, audits should not only be done when disaster is looming or when things just don’t add up.
The answer to this is pretty simple, each and every company can gain from auditing. All companies in Kenya are required to appoint an auditor annually according to the Kenya Company’s Act, section 159.
Accountants are tax experts who have a wealth of knowledge in the finance department. They know the financial business structure in and out and are less likely to make mistakes. An accounting mistake could cost you millions and even lead to the closure of a business. You save a lot of time and cost by trusting the experts. Auditors also provide an unbiased outlook of the business structure. As a third-party, they are not obligated to make things look right to save their own skin.
Auditing also helps you meet regulatory standards for business operation. The feedback given is used to help the business progress. It’s like getting honest feedback after an interview that helps you to package yourself better as a job seeker. You need a credible auditing firm to get the job done.