Auditing is an important measure for businesses because it helps them keep their processes as efficient and as transparent as possible.
Although small businesses typically do not do this often; this is a basic and normal process for large companies. That is because auditing can help safeguard their business operations.
That being said, external audits can be done by accounting services in Malaysia and they often employ strategies that are used in most businesses when it comes to auditing.
Read further to find out what these common strategies are.
There are two different types of auditing processes that are usually done in a company. That is the internal and external audits. Internal audits are done by an in-house accountant. This is usually deemed as the less formal approach to auditing and it is only done as a means to influence managerial decisions.
External audits, on the other hand, are conducted by an external firm or service- usually by an accounting firm or a certain certified public accountant. This is the way to go as external audits are deemed as formal and professional and will likely provide correct and accurate accounting information that is devoid of any biases and lapses.
Audits done by a third-party are usually helpful for outside stakeholders and potential investors as it will help influence their decisions and their moves about the company.
Internal audits are usually done frequently as a means to help the company grow. This is made whenever the company owner or the board of directors requires information that will help them decide the fate of the organization.
External audits can be time-consuming and expensive, which is why they are only done whenever a potential investor is looking into giving something to the company. Company owners should also devise a strategy that will help external auditors do their job in a more efficient manner.
The benefits of auditing are enormous. They are helpful when it comes to streamlining the company’s operations and it also reduces any wasteful business operation as well.
External audits are useful for whenever the company requires financing from potential investors, lenders, and major financial institutions.
Internal audits are necessary as it will help the board or the company’s owner to decide the fate of the company.
Business owners would often develop compliance or operational audit strategies in conjunction with financial audits.
Operational audits, for example, can help ensure the different departments of a company to complete their functions according to effective standard operating procedures.
Such audits can also help review the employees’ performance and to assess if additional training is necessary or not.
Compliance audits will ensure that companies would always meet specific guidelines that relate to third-party organizations. External organizations may include professional trade groups, government regulatory agencies, or licensing organizations.