benefits of an audit

 

Depending on the type of corporate structure and the amount of revenue your organisation receives, an audit may not be legally required.  This does not mean it should not be done as there are some benefits of an audit.  For example, some key points have been summarised below:

  • It highlights that the financial management and controls have been independently reviewed and based on the opinion of the auditors they are in order.
  • Raises confidence in your community that the organisation is being properly governed by the committee of management and that appropriate policies and procedures are in place.
  • Reinforces to donors that the organisation uses donations for the purpose that they were raised for.  This is not only important for obtaining new donors but retaining existing ones.
  • It reinforces to any philanthropic or government organisation that grants have been used in accordance with funding guidelines.  This raises the level of confidence with these organisations that can make it easier to obtain funds with any subsequent funding submissions.
  • It can help with the development of new partnerships or sponsorships as your organisation is seen as being credible.

As discussed in the previous posts, how you manage the audit will determine how you can get the most out of it.  That is why when you are planning your audit, whether it is compulsory or not, you should be clear about your objectives and then ensure the auditors achieves them.  Also, if the audit actual finds that there are problems then that is important as well as it provides an opportunity to improve the financial management of the organisation.

Once the audit has been completed then as part of your communication strategy you need to get the information out as not everyone will attend an Annual General Meeting or read the annual report.  Therefore, you need to ensure it is communicated through newsletters, on your website, through social media, press releases, annual reports as well as at any events.

The purpose of this post was to highlight how the audit can be beneficial to your organisation not only from an internal review of your financial management and control processes but how the audit can be used raise the level of confidence and credibility of your organisation with supporters, donors and the community.