10 tips for a first external audit

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The first external audit can be seen as a challenge. Although each company has its peculiarities, we have put together some recommendations that allow companies to prepare and ensure that their audit is a favourable process for the teams and focuses on the search for improvement opportunities.

Having a quality external audit is essential not only to be able to efficiently manage the company's resources and for the board of directors to rely on it for their resolutions, but also so that investors are informed and thus can make a decision that does not affect negatively to the parties.


What is an external audit?

External auditing is a practice in which professional auditors -who do not belong to the audited institution- evaluate its operation in relation to the processes it assumes, its regulatory framework and standards established in its industry or activity.

The first external audit is where the reliability and transparency of the company begins to be built. It helps ensure that accounting principles are followed and detect real or potential problems, such as fraud.


What do our experts recommend?

Although each company will go through its audits in a particular way depending on its activity, the regulations it must comply with, the practices of its sector and the expertise of its teams, there are 10 tips that all organizations should take into account:

1. Understand the indexes and standards

During the audit, the organization's performance is evaluated by comparing it with external standards and indices. Understanding them is essential to comprehend the approach that the process will have and to be able to carry it out more efficiently.

2. Make the company's reality known

It is important to maintain the focus on showing honestly the organization's reality. The professional or team of professionals who will be the point of contact with the auditors must be technically qualified to be able to respond to information requests in a clear and accurate manner.

3. Understand what is needed for the audit

In addition to selecting the most appropriate experts to form the working team, it is advisable to analyse which processes, systems and documentation will form part of the audit. In this way, the information that is likely to be required can be considered a priori.

4. Communicate the audit

Because the presence of external auditors can generate comments among collaborators, it is important to communicate the audit internally and maintain a close link with the team of external experts involved. It must be clear that the result of the audit is not a reflection of their value as professionals, but rather the opportunity to review and improve organizational processes.

5. Make all necessary inquiries

It may happen that, when asked for documentation or information on procedures, one does not understand how to respond. In these cases, it is important to ask the auditors what they need to know to provide the corresponding information.

6. Do not include irrelevant information in the audited processes or issues

When receiving a request for information or documentation, including only the required data, without additions related to other standards, will allow a more efficient audit focused on the agreed planning.

7. Learn from the questions

During the audit, the team of experts will have to answer many questions about the information presented. Understanding the scope of the processes and how to evaluate them is a training and development opportunity for the professionals involved.

8. Analyse the audit report

At the end of the audit, the organization will receive a report with the results found and recommendations for improvement. This document must be carefully reviewed to understand, communicate and plan the next steps in the development of the company.

9. Communicate the results

By communicating the results of the audit, internal teams understand the consequences of their work, recognize the transparency in the management and know the reasons why procedures are being improved.

10. Plan improvements in procedures

Finally, based on the auditors' recommendations and the organization's possibilities for change, improvements can be implemented in the procedures that enhance development and contribute to optimizing results in future audits.