When starting out as an SME, the thought of conducting an audit and reviewing accounts for the whole company can be daunting. It’s a busy time as you focus on getting your company up and running, hiring employees and setting a business strategy - but your finances, operations and processes will still need examining.
That’s where trusted professionals like Duncan & Toplis can help. To relieve the pressure on you, our accountants can ensure that you have audit services which are tailored to meet your needs, whilst remaining fully compliant.
But why do SMEs need audits? And how do our accountants conduct them?
No matter what size your business is or what sector you work in, financial audits are an indispensable tool for building financial transparency. When undergoing an audit, you are not just fulfilling a requirement but also sending a powerful message to stakeholders that your business operations are above board and accurate.
Audits involve a risk-based, systematic examination of your financial statements, operations and processes - including payroll and incoming/outgoing invoices. External auditors are regulated in the UK by the FRC and you have to be a registered audit firm, and a registered individual, to conduct an audit, thereby helping to ensure accuracy, compliance and risk mitigation.
When it comes to compliance, the regulatory landscape is extremely fast-paced and is constantly evolving. Failure to meet legal obligations can cause serious problems - especially for SMEs - so it’s important you use experienced auditors who know the industry inside and out.
What’s more, risk management is vital for SMEs as they get up and running, and audits can serve as a robust risk assessment tool. They help to identify potential vulnerabilities and recommend ways to avoid them, meaning your business can be saved from unexpected pitfalls. By doing this early on, you can navigate challenges more effectively and improve your long-term success.
The UK Government has been exploring ways to reform the audit industry for many years, so it’s important that your auditors are aware of what these changes could be.
Back in 2021, the Government published a consultation and white paper which outlined proposals for the reform. After receiving over 600 responses, it then published its response, including final reform proposals, in May 2022.
Since then, we have not yet seen a Draft Audit Reform Bill and a date has not been set for this, so the industry continues to wait with bated breath.
The majority of businesses now lean into technology to improve their efficiency, and we have seen this in the accountancy industry as remote auditing has become both preferable and necessary.
When conducting audits for our clients, we adopt the latest industry-recognised technology to enhance our service and best practice. We use data analytics software, Inflo, to implement digital auditing, which helps us to increase audit quality and add value to our clients. By using Inflo, our team is able to focus on the highest-risk transactions where errors or inconsistencies are most likely to be found.
What’s more, we also use a revenue analyser on the majority of audits we conduct. This helps to reduce our substantive sales testing and increase quality, by allowing our team to focus on unusual and outlier transactions.
While some accountants still conduct audits using paper-based systems, we’re empowered by the latest technology to carry out forensically detailed, reliable and trustworthy audits for all our clients.
If you’re an SME business owner and would like to learn more about how we can support you with audits, visit our service page or get in touch with our expert team today.
