In the world of business, few words have been known to strike fear into the hearts of executives worldwide than “audit”. An audit can mean many things, as we shall see.
However, what it essentially boils down to is the decision to let an external party go through your company and products with a fine-tooth comb, after which the results of their findings will be made available to you and, usually, to the public.
An audit might sound scary and even risky, but the benefits often outweigh the costs. Here are some of the reasons why it is worth arranging for an audit today.
In a world of GDPR, HIPAA, and AML, compliance is more pressing than ever. Companies of all stripes have been fined billions of dollars from regulators for their failure to comply with regulations around data privacy and transaction security, with the likes of Alphabet, Apple, and Goldman Sachs all being taken to the cleaners in recent years.
With a thorough external audit, you can identify all of your areas of actual or potential non-compliance and make adjustments accordingly. If you happen to be noncompliant, it is much better for a private auditor to spot this before the authorities do.
Contrary to popular belief, auditing is not only about internal processes and systems. It can also be a way to prove that your products are trustworthy, credible, and work better than your competitors (this is especially important if you were, for example, competing with a large e-commerce player like Shopify). There are many examples of external audits adding credibility to product lines.
One illustrative example can be found within the entertainment industry: the online gambling industry, which offers online titles to customers around the world. If we look at the platform Betway, we see that its casino products have been audited by eCOGRA, an independent third-party games tester that checks to ensure titles are fair.
The marketing-savvy company has used its squeaky clean audit results as a powerful marketing tool, assuring customers that they can expect fair, trustworthy titles at their site. Whether you’re marketing on Instagram or Medium, your audit can be an asset. This is what a product audit could do for you.
Of course, let’s not forget about your shareholders. The people that have bankrolled your venture and continue to own a stake in your success will need assurances that you are doing a good job and are managing your enterprise competently. If they do not have these assurances, they could pull out or even call for your removal. A clean audit could also boost recruitment, as discerning potential employees will notice this when they come across your LinkedIn.
By arranging an external audit, you can show that you are committed to balancing the books, remaining compliant, and doing business in an honest and competitive manner. A clean bill of health from the auditors will send a powerful message to shareholders that you are in control and can be trusted at the helm of the ship. In some industries, such a message is truly priceless.
No matter how big or small your company is, you cannot afford to be complacent with fraud. According to the auditing gurus at PWC, around half of all businesses will experience fraud at some point. This could come from unscrupulous employees or managers, or it could come from clients or partners that have been given more trust than they deserve.
While fraud is difficult to avoid completely, you have a responsibility to your employees, your customers, and your investors to identify it quickly and stamp it out as it arises. One of the most effective ways to do that is with a complete external audit, which will allow you to take a birds-eye view of your finances and more clearly identify financial discrepancies.
We can talk about the shareholders and the customers all day long, but the real reason you should want to arrange an audit is to ensure that you can be the best that you possibly can be. An audit will allow you to see with a fresh pair of eyes what you are doing right and where there is room for improvement.
It will allow you to spot the silly mistakes and oversights that are holding you back for no good reason. This way, you can begin to take your enterprise to the level that it deserves to be.
Auditing always feels scary at first, but you should remember that it is a cooperative process. Once you accept that your auditor is here to help you improve, you can truly get the most out of this constructive process.