In the small business world, every decision can be ‘make or break’, and the role of internal audit is often underestimated, and even considered unnecessary. However, internal audit isn’t just a luxury, or requirement reserved for large corporations. It’s a crucial tool that can help small and medium sized businesses navigate uncertainties and, perhaps more importantly, to mitigate risk.

In this first post of two posts on the subject, we’ve got six reasons for you around why internal audit may be worth considering for your business:

1 Risk management

Businesses of all sizes face a myriad of risks, from financial mismanagement to inefficiencies in the way they operate. Internal audit, whether of the finances or of procedures, helps to identify risks early on. This allows you to proactively implement controls and procedures to mitigate the risks, rather than look at them retrospectively.

2. Improve business processes

Internal audit can not only identify problems but also offer valuable insights into your business processes. By conducting systematic reviews, internal auditors can pinpoint bottlenecks, streamline workflows, and enhance the operational efficiency of the business. Optimising the business can reduce costs and boost productivity, helping your business stay competitive.

3 Prevent fraud

The smaller the business, the more devastating fraud can be. Internal audit plays a crucial role in detecting and preventing fraudulent activities by checking on the finances and any internal controls.

4. Strategic decision-making

Internal audits can provide business owners with reliable information and insights about the business in areas that are not easily seen in the day-to-day business information. This information can help to explain patterns in business data or provide an insight into something that’s currently hidden from business management.

5. Adapting to change

Regularly assessing processes and controls means that the business will be frequently measuring itself against changes that are occurring in the business world. This ongoing evaluation helps to ensure that a business stays agile and responsive to change.

6. Increase in employee responsibility

Depending on the size of your business, it’s unlikely to be feasible to employ a full-time internal auditor, but it may still be possible to task an employee or group of employees to devote part of their working time to internal audit work. Objectively stepping back from their normal day-to-day work will make them more aware of the need to consider risks and efficiencies in all their work.

So, internal audit can be an extremely helpful tool for small and medium sized businesses looking to thrive in a competitive marketplace. It can help you:

• proactively manage risks
• streamline processes
• prevent fraud
• make informed decisions
• drive continuous improvement
• develop your staff

If you’ve not considered Internal Audit for your business before, watch out of the second part of this article, whcih will look at how to plan an audit, with the aim of demystifying the process!

If you’re eager to get ahead though, get in touch and we can talk you through the best way to look at the areas you’re most interested in. You may be surprised how accessible the process can be, and how much difference it can make!