You may have heard the terms “audit” and “assurance” before and know what they mean. However, when someone uses them together, they mean a very specific thing. It’s helpful for you to understand what that is, so we’ll break down this concept a little in this article.
An audit, generally speaking, is an information or document assessment and systematic review. Assurance is a professional service. It aims to improve information quality and transparency. You do this because you want to reduce incorrect information-stemming problems.
When you look at the two words together, you’ll understand that audit is one assurance service variety. We’ll go into more detail on this notion below.
What is an A&A Practice?
There are companies that exist that call themselves A&A practices. These audit and assurance services can help many different business varieties.
An auditor can help the capital markets with financial reporting assurance and confidence. You might hire an auditor to perform an independent evaluation if you’re unsure about some financial report or business health details.
It is that auditor’s job to look at your financial statements carefully and thoroughly. They can then assure you that your company’s financial performance and position are right where you want them to be. Alternatively, they might find that some of your assumptions or projections are off.
When Might You Hire an A&A Firm?
You might hire an A&A practice or firm if the IRS is making noises indicating that they think your books are out of order. Keep in mind that an IRS audit is not the same as the audit an A&A company does for you. Still, one sometimes follows the other.
You might also contact an A&A firm if you’re about to launch an IPO. You need an accurate financial picture if you want the right company valuation. If you’re about to take your business public, millions of dollars could be at stake, so the work an A&A firm does is vital.
You may hire an A&A firm if you suspect fraud as well. Maybe you have a partner who you feel isn’t being honest with you, and the A&A firm can detect financial irregularities.
What Are Some of the Latest Tools an A&A Company Might Utilize?
When you contact an A&A company, it stands to reason that you want them to have the latest and best industry tools at their disposal. You want them to avoid making any mistakes that will render their findings incorrect. If that happens, the whole endeavor is pointless, and you’re wasting your money.
Because of this, audit and assurance companies have to be technology-oriented. To remain competitive in their market and beat out the competition, they have to keep up with industry trends and innovate whenever possible.
That means they’ll likely use things like artificial intelligence, advanced data analytics, and automation whenever possible if these are to their advantage. When you know that the company you hired has all of these tools at their disposal, you’ll see that you’re going to get a thorough and high-quality audit.
When you contact one of these companies, you’ll want them to be able to describe to you in detail what their process is. You might not necessarily understand all of it. After all, they use highly technical algorithms and advanced tech, and when they explain it all to you, some of it might not be the easiest to comprehend.
That hardly matters, though. It’s more about their results and making sure you can trust their findings. You’ll need to look into your chosen company’s background to see what businesses they have worked with and whether they have positive customer feedback.
A customizable solution is the one other thing you should look for when you’re going to hire an A&A company for your business. That’s because no two companies or business models are identical. You want the methodology that the A&A firm uses to yield the most accurate possible results.
The company can discuss different options with you and only utilize the tools or resources you feel are most likely to help you. You don’t want to use a company that can’t or won’t reveal its methods. This process should be entirely transparent, so you know where your money is going.
It’s probable that the more successful your company becomes, the more likely you will need A&A services. Now that you know about them, you can do some research and determine which one sounds best for you.
Author Bio: Mohamed Faraz – A digital expert and marketing consultant at Innovate HSE – A leading NEBOSH Coaching Institute in Dubai for NEBOSH course and other Safety Related Courses.