Going only up and above is not something you can be sure of while running a business, though expect and hope for it. Managing a business is like going on a steep, curvy pathway with unexpected twists and turns. It can lead you to a downward spiral if you are not fully prepared to handle what is right in front of you. Internal audits can help you prepare for such challenges and deal with them smoothly.
The internal audit focuses on the financial standing of the organization while identifying any pitfalls or risks in the business activity. It helps devise strategies to deal with challenges and maximize profitability. Regular audits are necessary, but they are inevitable at specific points and situations.
Keep scrolling down into the details of this article to learn and explore when is the right time to conduct an internal audit and ensure efficient and reliable operations of your business setup.
Top 6 Times You Should Conduct an Internal Audit
The internal audit establishes the internal controls of the organization and adds value to the operations. It helps plan sustainable goals while being aware of the current standing of the organization. Still, many setups fear and avoid it. However, you should embrace it to ensure the success and profits of your organization. Learning about the crucial times to conduct an internal audit can help you plan it efficiently.
Here are some of the most crucial times at which you should conduct an internal audit and reinforce the smooth functioning of your organization.
1. Planning For New Investment
Planning for a new investment is the perfect time for you to conduct an internal audit. Whether you are planning to make an investment or accept an investment in your organization, conducting an internal audit is equally applicable. It will offer insight into the current financial condition of the organization. In light of that, you will be better able to direct the investments and generate profits. Many setups hire internal audit companies in Dubai to get professional and reliable insights into their financial aspects.
2. A problem in Account Books
When you notice problems in account books, it is the right time to conduct an internal audit. The management of every business organization makes estimations and predicts the profits and losses of the setup during a specific time period. If the actual results are far from the estimations and predictions, it should be enough to ring alarm bells. You must conduct an internal audit to explore what went wrong with the account books. Even if you fail to find any fraudulent activity, you will uncover the reason and be able to devise counter-strategies.
3. A decline in Cash Flow
A decline in the cash flow or the profits of the organization is another crucial time when you need to conduct an internal audit. The cash flow in and out of business specifically impacts its functioning and performance. You will notice higher profitability if it is happening smoothly. However, if there is any discrepancy, you will notice hassle, irrationality, and loss. You should not ignore the signs and opt for an internal audit if the discrepancies persist. It will help you uncover the truths about the financial processes and devise solutions to deal with the issues.
4. When Key Employee Leaves
When some key employee leaves the organization, it is the most crucial time to call for an internal audit. There can be a gap in the performance and profitability of the organization when a key player is missing from the scene. Conducting an internal audit early on can help you avoid getting on that road. It will provide not only your insight into the current financial position and standing of the organization but the role of that employee in it too. You will also be able to learn about their strategies and plans and carry them on to avoid any hindrance in future plans.
5. Before and After Growth
Before and after a period of growth are other important times at which a business organization should conduct internal audits that are effect for business. Before the growth period, an internal audit can help you identify the current standing, potential risk, and opportunities and devise strategies to make the most out of the situation. After growth, it can help uncover the progress as well as see which strategies proved beneficial. You can also utilize it to develop long-term plans and ensure sustainable growth.
6. Every Once in A While
Every once in a while is the perfect time to conduct an internal audit in your organization. You should not wait for some internal or external event to plan an audit. Instead, it should be a regular part of your business operations. You can opt for quarterly or half-yearly internal audits according to your ease. Ensuring regular audits will help you see the progress of your business, in addition to identifying potential risks and opportunities early on. You can hire internal audit companies in Dubai and leave the task to experts to derive the growth and success of your business setup.
Is it time for you to conduct an internal audit?
Even if your business has no major event or activity happening in the future, conducting an internal audit can prepare you for the future. Get professional internal auditors on board and ensure better insight into your financial and business operations.
