Running internal audits is an essential part of any startup business operations. It helps you assess the health of your company. But with all the other business tasks you need to accomplish, planning and overseeing an extensive audit can be a laborious effort. So, how do you do it?
Here, outsourcing can be a surprisingly effective solution. Let’s take a look at how it works and what you need to do to make it successful.
Why Outsource Your Startup Business Internal Audits
One question you will likely have early on is why have a third party do your audits for you. The first reason is already mentioned above. You just can’t do it. Auditing your entire company or just a part of it can lead you to use a lot of resources for it.
And for a small company like yours, it can become a logistical challenge. For instance, you might have to pull out some of your staff to do the work, disrupting their core tasks. And even then, you might still find yourself short-handed, resulting in the audit taking longer than it should.
Through outsourcing, you can access a full team to do your audits. And they can do these in the background. What’s more, these teams are fully expandable. Thus, you can make your audits as large as you need without worrying about additional resources.
Getting A Fresh Perspective
A major downside of doing internal audits is that you have to contend with your personal biases towards the company. For instance, you might overlook some things just because you have been used to them. That can skew the results of the audits.
An external team can give you a fresh perspective about your company. With that, they can pinpoint details that you might not even be aware of. Additionally, they can provide you with new ideas on handling various work areas based on audit results.
Better Internal Response
Due to various factors like office politics, your in-house team might sometimes respond negatively to audits done by their colleagues. That can create friction when you are implementing changes based on those.
If you let an external provider do the audits for you, there is a higher chance of your internal team responding more positively. That has to do with the perception of external auditors being independent of you and, as such, considered being fair. Additionally, management puts more value on external experts. That again comes due to their vastly different perspectives.
The Concerns With Outsourcing Your Startup Business Audits
Outsourcing your internal audits is not without its concerns. However, these should not detriment you. Instead, understanding them will help you better implement the effort and get better results in your study.
One of the concerns here is security. More than other outsourcing efforts, you are giving external parties access to your more confidential company information. While the auditing party might be benign, there is the danger of them leaking this information out if they are not carefully handling it.
Another concern here is continuity. If your external audit team is not familiar with your work processes, they might find it hard to follow the changes within the company. That can be especially the case if there are a lot of changes happening during the time of the audit. It can create problems in how the audit team conducts the work. It will also affect how you implement the resulting recommendations.
Outsourcing Your Startup Business Audits The Right Way
When planning to outsource your startup business audits, there are some things you need to take into account. These include:
- The size of your company: This determines various things, like how large your audit will need to be and how capable you are of holding the audit on your own.
- Available resources: Another determining factor in your outsourcing strategy is the available resources you have. Depending on your financial situation, you can either outsource just part of the audit process or the entirety of it.
- Applicable laws and regulations: In some regions, outsourcing of audit functions might not be allowed. Thus, you should review the pertaining laws in the area where a provider operates first.
By looking into these three considerations, you get a better idea of your outsourcing strategy. Depending on the availability of your team and resources, you might use outsourcing to augment the audit. This one is a common alternative to handing the whole work over to a provider.
Managing The Outsourced Internal Audit
Once your startup business decides to outsource your internal audit, you still need to oversee its implementation. The first thing you need to work on is drafting the right contract for the project. Be clear about the structure of the auditing process. This will help the provider plan their strategies for the work.
You should also be clear about the deliverables, including:
- Written assessment reports
- Opinion of the audit team on your internal processes
- Work to be done on risk management
- Comment of the internal auditor regarding the quality of management
All of these deliverables will provide you with a comprehensive picture of your audit results. For that, you also need to be clear about what each deliverable will contain.
Handling Outsourcing Risks
As mentioned earlier, outsourcing your internal audit is not without its risks. Make sure to open these concerns up when interviewing the proposed audit team. They should fully disclose the strategies they employ to mitigate these. Additionally, they can discuss the likelihood of changes like the addition of new team members and how they handle it.
Do an extensive review of their various strategies, such as data protection and communication management. Another thing that you should look into is potential conflicts of interest. The provider also needs to clear these before you launch the audit.
Helping Your Startup Business Internal Audits A Success.
Of course, with all the other work to be done, you might not be able to oversee the audit constantly. This is where Virtua Solutions’ virtual assistants come in. Here, we can serve as liaison officers between you and the outsourced audit team. This ensures that any concerns can be relayed during the audit and ensures continuity in the work.
Additionally, we can perform various administrative and clerical duties needed during the audit process. For instance, we can help in the data gathering and entry work. With that, your team won’t need to take time off to provide some assistance. So contact us today. With our help, your startup business internal audits can be completed faster.