Many businesses view an audit as a burden. They know that they must tick the box for regulators and shareholders, but believe that inviting an auditor into their business is just extra admin and additional expense.
However, an audit is certainly not a burden. Audits have a few primary goals:
- Transparency.
- Risk management.
- Trust building between the business and the stakeholders, shareholders and the public.
An audit’s primary purpose is to provide independent assurance that a company’s financial statements are accurate and fairly presented.
The audit process may also identify opportunities to strengthen accounting systems, improve processes and enhance compliance with accounting standards.
If your business is trading internationally, you should be completing a compliance audit, whether it is mandatory or not, as it can have numerous benefits that go beyond simple compliance verification.
What is a compliance audit?
A trade compliance audit is a comprehensive review of a business’s import and export processes to ensure that they adhere to all relevant trade laws.
The main purpose is to verify accurate customs declarations, minimise financial penalties, avoid supply chain delays and to ensure adherence to regulations set by HMRC and the Government.
When your business undertakes a compliance audit, there are three main things that auditors will look for, these are:
- Documentation and record keeping – Auditors will verify that commercial invoices, shipping manifests, customs documents and certificates of origin are aligned correctly and are stored for the legally mandated retention period.
- Classification and valuation – They will ensure that the correct commodity codes have been used and that the declared value of imported or exported goods accurately reflects the total transaction value.
- Special procedures – Auditors review the legitimate use of customs reliefs, trade agreements and specific import/ export licenses.
They may also look for adherence to cybersecurity, data privacy, financial reporting and health and safety rules before official assessments take place.
Some businesses may have to undertake compulsory compliance audits due to the nature of the business. If you are unsure if this applies to you, get in touch!
What are the benefits of a compliance audit?
Specialised audits deliver highly accurate reports on a business’s financial risks and ensure smooth, lawful international operations.
An audit can protect your business against HMRC penalties. It can protect companies against hefty fines, seized goods or revoked authorisations during post-clearance HMRC checks.
Identifying cost savings is one of the biggest benefits of an audit. The auditor will identify instances of overpaid duties and fees to ensure that you are fully utilising preferential tariffs and customs reliefs.
Auditors also pinpoint errors in commodity codes or origin rules before any goods are held at borders, preventing supply chain delays, which helps to keep your international logistics on schedule.
Beyond regulatory compliance, many organisations voluntarily request independent audits to demonstrate their commitment to responsible business practices. Many companies will seek a voluntary audit to gain a competitive advantage by instilling faith in shareholders and attracting investors.
Auditors will evaluate an organisation’s internal controls and operational processes as well. After an audit has been completed, the findings can allow a business to streamline its operations, optimise processes and enhance efficiency.
It is important for businesses to remember that compliance is an ongoing process, not a periodic checkpoint that just needs to be done around audit times.
How can we help?
An audit is a fantastic way to ensure compliance within your business. To grow your business, you must first understand and take action against any shortcomings that are affecting the business.
Our talented auditors are here to support the growth of your business.
We are registered to conduct audits and are fully compliant with all relevant regulatory bodies, including specialist AIM, FCA, ARLA and solicitors’ accounts audits.
Get in touch today to set up a voluntary audit within your business.