Internal and external audits can be painful for many organizations. Lots of time and effort goes into preparing information for the auditors, and the goal is typically just to get a clean bill of health on the financials.
“The survey of 300 C-suite executives and 100 audit committee members, found that nearly three-quarters of the top executives and 91 percent of the audit committee members polled said audits of financial statements identify opportunities to improve business performance. In addition, 70 percent of C-suite executives and 79 percent of audit committee members believe that financial statement audits provide valuable business insights.”
Surprised? I guess we shouldn’t be, given all the financial and operational information that’s collected and organized to support internal and external audits.
Of course, most of this information could, and should, have been made available to management through their enterprise performance management (EPM) systems prior to the year-end audit. However, if the audit report brings new insights to a new audience – and does so on a timely basis – this can certainly yield benefits.
Per Deloitte, audit insights that may prompt companies to take action include;
- Comments about the industry and market
- Comments on company processes and policies
- Identification of company inefficiencies, redundancies, and risks
More companies are starting to leverage insights that auditors are capable of delivering when they use the latest audit analytics tools.
The Deloitte survey also found that many companies miss out on opportunities to improve business by leveraging insights from audits. According to the survey, one out of every three companies rarely or never leverages the information received from financial statement audits.
To learn more, check out the article in Accounting Today titled “Audits Improve Business Performance.”