What Are the Benefits of a Financial Audit?

28th July 2022

What is a financial audit?

A financial audit is an investigation conducted by an external and independent third party into a company’s financial statements, with the objective of providing assurance that they are prepared properly and show a “true and fair” position according to the relevant financial reporting framework.

 

Why are audits important and what are the benefits?

Audits are important because they provide the three Cs – creditability, confidence, and control.

Credibility

By engaging with an external statutory audit firm, a company’s financial statements are given greater credibility whether that be important in the company’s business sector or if for example, a company is looking towards a sale or major financing event. Audited accounts provide comfort that a company’s financial reports are free from material misstatement either due to fraud or error.

Confidence

Whilst smaller businesses are often owner-managed, there is a significant number where directors or management run the company on a day-to-day basis on behalf of shareholders who have minimal operational involvement. By providing an impartial assessment of a company’s financial statements, an audit can give confidence and clarity to shareholders that the operations of the company are being run correctly, effectively and in their best interests.

Control

Alongside the verification work performed on a company’s financial data, an auditor will also obtain an understanding, and test the operation, of a company’s core financial systems which underpin the figures presented in the financial statements. In doing so, an auditor will assess the effectiveness of the controls operating within each system and make recommendations where deficiencies are identified to minimise the risk of fraud or error.

 

How can we help?

Our audit and accounts teams thrive on providing an informative and courteous service, meeting stringent deadlines, and maintaining an excellent standard of communication, across services such as small business advisory and pension schemes audits. We also provide a range of other services, such as R&D tax credits support and cloud & outsourced accounting services.

At Edwards, we ensure that our teams are professional, courteous, and helpful at all times. We also prioritise getting to know you and your business, so wherever possible, the same team will be assigned to you year on year. This will give you peace of mind that you are dealing with professionals who truly know your business inside and out.

Please contact us to speak to our Loughborough and Walsall auditors or our team of trusted chartered accountants.

 

For our West Midlands offices:

Tel: 01922 743 100

Email: aldridge@edwardsaccountants.co.uk

 

For our East Midlands offices:

Tel: 01509 357 707

Email: loughborough@edwardsaccountants.co.uk