Why External Audits Are Important: All You Need to Know
Auditing adds a new dimension to management to improve the organisation, but it also identifies errors that can potentially impact the business. To ensure a company audit is conducted using best practices set by the Singapore Standard on Auditing (SSA), collaboration with an audit firm is necessary.
Hiring a professional external audit team is a vital step to guarantee a company’s financial health and ensure that no inconsistencies hinder its progress. So, read on to understand the four reasons why it’s necessary to conduct an external audit to maintain an organisation’s efficiency and finances.
An external audit is conducted by a team of certified accountants from large or small audit firms in Singapore, ensuring both affordability and efficiency. As they’re wholly experienced and credible, these accountants offer a copper-bottomed, well-grounded decision-making process.
Due to their expertise, external auditors are more capable of picking up on potential internal control problems, financial reporting and regulatory issues and inconsistencies that their counterparts may miss. Ultimately, the keen eye of external auditors allows them to thoroughly scrutinise an organisation’s operations and identify financial risks to its accounts, shortcomings in its internal controls, and even non-compliance issues.
A focused audit
A company requires an objective perspective of its financial health and condition. With the aid of an external audit, ensuring the accuracy and validity of a company’s financial accounts can be easily realised.
Since these auditors are linked to external audit firm services, a company can be sure that the audit team they hire will focus all of their efforts on the job at hand. Thus, the focused nature of an external audit guarantees a better overview of your company’s financial reporting.
Transparency and impartiality
Since an external audit team comes from outside the company, typically from audit firms, they must do their jobs as perfectly and honestly as possible to protect their firm’s reputation and interests.
This professional detachment from the organisation helps conduct an audit without the fear of any unfavourable consequences. This inherent transparency and impartiality is also an effective fraud control mechanism that improves a company’s credibility.
One key advantage of an external audit is its ability to reveal critical issues that may remain unchecked, causing problems that could otherwise have been prevented. These issues typically relate to the business’s internal controls and processes that affect its accounts or operations that are noncompliant with established laws.
If any of the former are discovered, external auditors will state their findings on their report, leaving it up to the company to alleviate them as they see fit. Otherwise, they’ll provide corrective actions on all non-compliance matters that require an organisation’s immediate attention.
Outsourcing your company’s audit to third-party external auditors is a reasonable choice if you want to improve your company’s financial reporting credibility and efficiency of internal systems and control. The audit team will provide a critical assessment of the current workflow, but they will also propose corrective solutions to all compliance matters that they encounter. A credible and valid audit of your company’s finances is the stepping stone towards developing robust and conforming organisational processes.
If ever your company needs an external audit, don’t hesitate to reach out to OneStop Professional Services. As a trusted firm of Chartered Accountants and Certified Public Accountants, you can rely on us to be exact and thorough in conducting our auditing services. And if you ever need to outsource some of your business needs, we also offer critical corporate services such as nominee director services and taxation services.