Auditing is increasingly becoming a part of the organisational model, ensuring compliance throughout the company. It has always been there, but with time its use has increased. At first, people didn’t believe in its potential to identify future risks and reduce them. However, with the advancement in technology and improvement in critical thinking, people and companies have become smarter. They are looking for ways to achieve a competitive advantage while optimising performance using the least resources. Audit planning is one of the most prominent elements that help businesses achieve what they are looking for. From private firms to government agencies, each firm needs to be audited.
In the literal sense, an audit is the check and balance of a company’s processes, work ethics, environment, employees, compliance with rules, etc. Since technological advancement has automated the major of the process, it becomes difficult to document everything. This increased the hassle of inspecting/auditing, recording and reporting through the traditional paper-based audit system. It was then that companies shifted from the old methods to a digital platform that eased the task, ensuring greater compliance and accuracy. The company or third parties can now use platforms or applications to inspect or audit.
What is Audit Planning?
We have talked about auditing and inspection above. It is clear it is an assessment and reviewing task for the company’s better performance. Still, many people do not know the auditing company goes through a long planning and implementation process. It is because any mistakes in the process may lead to significant losses to the company, be it financial or in terms of product failure. Audit planning enables organisations to plan in advance, deciding which areas to audit, who will do it, what process needs to be followed, and when complete. It is necessary to conduct safe and efficient audits.
The planning is part of the auditing process with a dedicated team of planners and analysts that design its structure, helping auditors perform their tasks seamlessly. But since many companies have started using audit apps, the process has gotten much more manageable. They need to create a customised checklist to see every part of the company get audited. It dissolves the previous issues related to missing areas that need the utmost attention that often lead to losses. However, the auditor needs to have the required knowledge and skills to analyse even if he uses an app for the process.
How Important is an Audit App?
Digitalisation and automation are two outcomes of technological advancements where companies focus on optimising productivity and performance while using minimum resources. This even has placed the world on an online platform to make everything accessible and more manageable. One such invention has to be the audit application. The prime purpose of the app is to create personalised checklists depending on the industry and examine the company and its operations to decrease future issues related to poor management.
The audit planning app not only plans the audits but implements them while generating real-time reports highlighting the areas at risk. They then assign the tasks to the concerned department or people to lessen its impact or avoid more significant losses. These applications are available for iOS and Android operating systems and can be downloaded on the device. Moreover, the app comes with advanced features. It enables auditors to add multiple videos or pictures as proof, customise the checklist, personalise templates, use digital signatures, automate auditing, generate instant reports, etc. However, here are five factors that auditors should focus more on while planning an audit.
- Company size and its operations
- Financial system, including internal control and compliance with government rules.
- Company’s environment
- Company history dealing with the clients
- In-depth knowledge about the company, including its goals, objectives, values, products and services.
Benefits of an Audit Plan
An audit plan helps auditors or companies streamline their goals and needs by achieving compliance throughout their processes. An organisation that frequently audits or inspects its processes is known to do better than those that fail to realise its importance. The audit plan creates strategies for various situations when examining the firm’s procedures to avoid hurdles. Secondly, it plans the audit keeping in mind the client’s budget, and few even do it a low costs depending on their experience and skills.
It decreases misunderstandings between the auditor and client. It even detects potential risks to take proactive action, continuing with the audits to maintain accuracy and reliability. Organisations following a strict implementation structure always want to complete the tasks on time. In auditing, they are more strict about the completion time to avoid disturbances that often lead to low productivity. It becomes crucial for businesses to remember shorter the completion time for audits lesser will it be its cost. However, it should ensure all the areas receive equal attention.
What is the Cost of an Audit?
Auditing is a broad term used for examining a small or large enterprise. It is done for different industries like healthcare, logistics, entertainment, nursing homes, automobile, financial institutions, etc. Thus, quoting the exact price of audit planning is not possible. Here, the cost varies, seeing the industry for, e.g. the financial institution auditing costs will be more expensive than a retail business. In short, the amount dramatically varies across sectors.
Further, a small or new business auditing cost is much lesser when compared to a multinational company. This is because a large company has many departments, employees, advanced functions, multiple operations, etc. It has a greater hierarchy or structure that needs more time and a professional team than a small business. Therefore, most companies are switching toward an auditing app that is cheaper than professional auditors.
Audit or inspection guarantees a bright future for organisations that frequently examine their business operations. The process starts with audit planning and ends with taking proactive action against the risks associated with management or production. Thus, the stronger and stricter an audit is, the more successful a business gets with time, achieving a competitive edge and later greater profits than other companies.
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