Making the most of your statutory audit results

Statutory audits can sometimes feel like a necessary evil, but they are far more than a compliance exercise.

They can offer valuable insights into your organisation’s financial health and operational efficiency and knowing how to interpret and implement the findings from an audit can set you on a path to greater financial stability and operational success.

However, the first step in making the most of your statutory audit is to thoroughly understand the results.

Your auditors will provide a detailed report that can be overwhelming at first glance, but it’s crucial to break it down into manageable parts.

Start by reviewing the auditor’s opinion.

This section indicates whether your financial statements are presented fairly and in accordance with applicable accounting standards.

A ‘clean’ or unqualified opinion is what you want, but even with a clean opinion, there may be significant areas highlighted that require your attention.

Next, dive into the key findings.

These are the specific issues the auditor has identified, ranging from minor inefficiencies to more serious compliance breaches.

Pay particular attention to any material weaknesses or significant deficiencies in internal controls, as these could have substantial impacts on your business.

Finally, review any suggestions or recommendations made by the auditor.

These are typically based on best practices and can guide you in strengthening your financial processes.

Take the time to discuss these findings with your finance team and seek clarification from the auditor if anything is unclear.

Taking actionable steps based on auditor recommendations

Once you have a firm grasp of the audit results, it’s time to take action.

The worst thing you can do is file the report away without addressing the issues raised.

Consider creating an ‘audit roadmap’ for improvement, and prioritise the recommendations based on their potential impact on your organisation.

Start by addressing any areas of non-compliance as these are often the most critical – they could expose your organisation to legal risks or financial penalties.

Work with your finance and compliance teams to develop a plan to rectify these issues immediately.

For areas where the auditor has suggested improvements, evaluate the cost-benefit of implementing these changes.

Some recommendations might require significant investment, but if they lead to better financial management or reduced risk, they are worth considering.

Be strategic in your approach – not every recommendation will be feasible, but those that align with your long-term goals should be prioritised.

It’s also essential to set timelines for implementing changes and assign responsibility to specific team members.

Regularly check in on progress to ensure that these actions are being carried out effectively.

Although this may seem complicated, an accountant and tax adviser can help you with this so feel free to give us a call.

Fostering a culture of continuous improvement

To truly benefit from the audit process, you should foster a culture of continuous improvement within your organisation.

Encourage your team to view audits not as a burden but as an opportunity for learning and growth.

Regularly revisit past audit findings to assess whether the changes you implemented have been effective.

Use these insights to inform your business strategies and refine your financial practices over time.

In addition, consider conducting internal audits throughout the year.

These can help you identify potential issues before the next statutory audit, allowing you to address them proactively.

By taking a proactive approach, you can improve your organisation’s financial health and reduce the likelihood of adverse findings in future audits.

Your auditors aren’t just there to point out mistakes – they should also provide guidance and support so if you’re not receiving this, please get in touch.

We’d be happy to read through your audit results and give you guidance on the next steps in the process.

Please visit our contact page and ask to speak with an audit expert.