'
Spending
extra finances on monitoring and auditing doesn’t sit in well with most
business organizations. Most people running businesses do not see the need to
monitor and audit their business. On an already strained budget it is logical
that some business do away with the whole audit and monitoring process. For the
smooth running of an organization or a business audits and constant monitoring
needs to be incorporated into the business.
An
audit is a means of evaluating the internal controls of a business. It is aimed
at evaluating the business in terms of how it is run and the efficacy of
various business systems. There are numerous benefits of carrying auditing and
monitoring. The following are some of the most prevalent benefits of the
processes;
- Aids in Assessment of Risks
Frequent
monitoring and auditing enables businesses to be able to prepare and better
deal with risks. An efficient audit system involves risk assessment. This equips
the stakeholders and business officials to be able to detect oncoming risks and
to avert them.
Monitoring
and auditing the various systems of a business enables for any changes in the
exact environment of the business to be noted. These changes are most likely to
be the impending risk that could affect the business. The magnitude of the
various risks can also be assessed through auditing and monitoring.
The
business management can be able to know the effect the risks would have on the
business and would, therefore, be able to prepare for future risks. Through
assessing risks, monitoring and auditing, strengthens the business by improving
their systems to be better suited for certain risks.
- Enables fulfilment of Objectives
Monitoring
and auditing require a certain level of internal control. This internal control
is geared towards the achievement of business objectives. As auditing and
monitoring takes place there are various activities that are carried out. These
activities include supervision, prevent and detect irregular transactions,
maintenance of business records, evaluate ongoing performance and also promote
the productivity of operations.
All
these tasks are essential in the attainment of business objectives. As auditing
and monitoring takes place each of the key components that lead to the
successful fulfilment of business objectives are catered for.
Auditing
and monitoring business systems not only ensure the smooth running of the business
in lieu with the achievement of the objectives but it also showcases the
failings of various systems. Carrying out audits and constant monitoring
enables for the failures of the business to be noted in advance and for them to
be corrected.
Auditing
and monitoring increases the chances of a business achieving its goals and
objectives by looking at all the various transactions involved in the business
and ensuring they run smoothly.
- Ensures Laws and Regulations are Abided by
As
with many businesses there comes a time when the law is broken either
unknowingly or knowingly. Businesses with numerous systems often make it
difficult to monitor the dealings of each department. Thus, a department may go
rogue and carry out illegal dealings within the organization.
Auditing
and monitoring come in handy when it comes to making sure that the various
departments abide by the law. Audits are conclusive enough to cover the
dealings of all departments. These audits ensure that there is a compliance
with the laws and regulations of both the business and of the state.
Internal
audits protect the businesses from lawsuits and external action once external
audits find a violation of any law or regulations. Therefore, carrying out
audits and constantly monitoring business systems ensures that the relevant
laws and regulations are abided to.
- Improves Operations Efficiency
For
any business operation the efficiency of its various processes are very
important. To maintain their client list the business needs to produce the
services or goods that they proclaim they will. The successful running of the
business relies on the ability of the business to follow through on their
policies and procedures. By auditing and monitoring a business is able to
evaluate the effectiveness of these procedures and policies.
In
case a policy or procedure does not match what the business intends it to
improvements can be easily made. Constant monitoring enables for the business
management to be able to note any discrepancy in the business policies. Once
noted the effectiveness and efficiency of the business procedures can be
improved to ensure better results.
- Enables the Detection and Prevention of Fraud
Frequent
analysis of business operations provides insight of the normal running of the
business. Auditing of a business enables the company to prevent fraud. Various
accounting irregularities can easily be detected and hence prevented. Auditing
is able to detect fraud since auditing officials design and modify internal
control systems which detect fraud.
Another major way that auditing prevents fraud is through deterrence. By being aware of the regular audit program of a business any employee or vendor may be highly discouraged from trying to defraud the business.
The
running of a business involves various operations that are crucial to it.
Auditing, whether internal or external, and monitoring each provide a way for
these operations to be examined and evaluated. The evaluation of separate
business systems is highly beneficial in ensuring that the business as a whole
runs smoothly. Carrying out an audit enables for the business operations to be
scrutinized which exposes any risks, problems or even failures of the systems.
All which can be fixed and the business runs efficiently. Monitoring enables
for the business to run efficiently by ensuring that every system runs as it
should as any system with a defect can be managed.
Spending extra finances on monitoring and auditing doesn’t sit in well with most business organizations. Most people running businesses do not see the need to monitor and audit their business. On an already strained budget it is logical that some business do away with the whole audit and monitoring process. For the smooth running of an organization or a business audits and constant monitoring needs to be incorporated into the business.
An
audit is a means of evaluating the internal controls of a business. It is aimed
at evaluating the business in terms of how it is run and the efficacy of
various business systems. There are numerous benefits of carrying auditing and
monitoring. The following are some of the most prevalent benefits of the
processes;
- Aids in Assessment of Risks
Frequent
monitoring and auditing enables businesses to be able to prepare and better
deal with risks. An efficient audit system involves risk assessment. This equips
the stakeholders and business officials to be able to detect oncoming risks and
to avert them.
Monitoring
and auditing the various systems of a business enables for any changes in the
exact environment of the business to be noted. These changes are most likely to
be the impending risk that could affect the business. The magnitude of the
various risks can also be assessed through auditing and monitoring.
The
business management can be able to know the effect the risks would have on the
business and would, therefore, be able to prepare for future risks. Through
assessing risks, monitoring and auditing, strengthens the business by improving
their systems to be better suited for certain risks.
- Enables fulfilment of Objectives
Monitoring
and auditing require a certain level of internal control. This internal control
is geared towards the achievement of business objectives. As auditing and
monitoring takes place there are various activities that are carried out. These
activities include supervision, prevent and detect irregular transactions,
maintenance of business records, evaluate ongoing performance and also promote
the productivity of operations.
All
these tasks are essential in the attainment of business objectives. As auditing
and monitoring takes place each of the key components that lead to the
successful fulfilment of business objectives are catered for.
Auditing
and monitoring business systems not only ensure the smooth running of the business
in lieu with the achievement of the objectives but it also showcases the
failings of various systems. Carrying out audits and constant monitoring
enables for the failures of the business to be noted in advance and for them to
be corrected.
Auditing
and monitoring increases the chances of a business achieving its goals and
objectives by looking at all the various transactions involved in the business
and ensuring they run smoothly.
- Ensures Laws and Regulations are Abided by
As
with many businesses there comes a time when the law is broken either
unknowingly or knowingly. Businesses with numerous systems often make it
difficult to monitor the dealings of each department. Thus, a department may go
rogue and carry out illegal dealings within the organization.
Auditing
and monitoring come in handy when it comes to making sure that the various
departments abide by the law. Audits are conclusive enough to cover the
dealings of all departments. These audits ensure that there is a compliance
with the laws and regulations of both the business and of the state.
Internal
audits protect the businesses from lawsuits and external action once external
audits find a violation of any law or regulations. Therefore, carrying out
audits and constantly monitoring business systems ensures that the relevant
laws and regulations are abided to.
- Improves Operations Efficiency
For
any business operation the efficiency of its various processes are very
important. To maintain their client list the business needs to produce the
services or goods that they proclaim they will. The successful running of the
business relies on the ability of the business to follow through on their
policies and procedures. By auditing and monitoring a business is able to
evaluate the effectiveness of these procedures and policies.
In
case a policy or procedure does not match what the business intends it to
improvements can be easily made. Constant monitoring enables for the business
management to be able to note any discrepancy in the business policies. Once
noted the effectiveness and efficiency of the business procedures can be
improved to ensure better results.
- Enables the Detection and Prevention of Fraud
Frequent
analysis of business operations provides insight of the normal running of the
business. Auditing of a business enables the company to prevent fraud. Various
accounting irregularities can easily be detected and hence prevented. Auditing
is able to detect fraud since auditing officials design and modify internal
control systems which detect fraud.
Another
major way that auditing prevents fraud is through deterrence. By being aware of
the regular audit program of a business any employee or vendor may be highly
discouraged from trying to defraud the business.
The running of a business involves various operations that are crucial to it. Auditing, whether internal or external, and monitoring each provide a way for these operations to be examined and evaluated. The evaluation of separate business systems is highly beneficial in ensuring that the business as a whole runs smoothly. Carrying out an audit enables for the business operations to be scrutinized which exposes any risks, problems or even failures of the systems. All which can be fixed and the business runs efficiently. Monitoring enables for the business to run efficiently by ensuring that every system runs as it should as any system with a defect can be managed.
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