The Benefits of Engaging a Non-statutory Audit
Non-statutory audits (Also see Types of Audit – Statutory Audit and Non-statutory Audit) refer to the audits which are not required by law. On the other hand, statutory audits are mainly about the procedures, financial systems as well as fraud prevention (Also see Audit Procedures That Helps in Detecting Fraud) of an organisation. A company may appoint its internal auditors or engage an audit firm in Johor Bahru to perform non-statutory audits, and they can conduct the audits in any part of the company. As the entities have the right to choose whether to have a non-statutory audit or not, they may obtain several benefits by conducting it.
Freedom in Appointing Advisors
To perform statutory audits, a company needs to engage with licensed professional auditors outside of it. However, in the case of non-statutory audits, it can appoint certified internal auditors (Also see What is Over-auditing of Internal Audits?) or licensed management or business accountants, no matter these people are inside or outside the company. This means that the company may select the auditors who suit the job and its budget. Also, it can employ the experts in other areas; for example, if it has an environmental audit, it may hire environmental biologists to help in the assessment.
In non-statutory audits, the auditors or the audit firms can give suggestions and assistance to the company to solve the problems that they have encountered in the audit process. IT audit is among the most common forms of non-statutory audit, which helps in ensuring that the company is using the most effective and efficient procedures, computer systems and networks. On the other hand, forensic audits help make sure that the company has established policies that function to prevent fraud.
Flexibility in Reports
Non-statutory audits can cover a lot of areas in a business, rather than covering financial reporting solely. Those parts may include human resources, processes, operations and inventory controls. A company may have a customised non-statutory audit to help them in determining issues of concern, for example, problems about its accounting or IT systems. It can also use this audit to acquire information that assists it in decision-making, for instance, decisions about takeover and expansion. As non-statutory audits do not only cover financial reporting, they help the business owners to have a better understanding of their company’s processes, operations, as well as customer’s and employee’s satisfaction. Besides, by reporting the manufacturing and overhead costs, performance audit may help the business owner in checking whether his company is operating at its maximum productivity.
Attestation is another form of a non-statutory audit. The company may hire certified accountants outside of it to verify both financial and non-financial data. However, such a process is not as detailed as full statutory audits. Typically, companies that want to assess the information before they complete a deal will use this method. As an instance, suppliers may ask for the attestation of the robustness of a company’s finances (Also see Which is the Most Important Financial Statement?) before they decide to advance lines of credit. Also, firms may use attestations to assess non-financial information, for example, whether they are eligible for specific government grants.