Top 5 Signs Your UK Business Needs an Internal Audit Right Now

Running a business in the UK comes with a host of responsibilities, from staying compliant with ever-changing regulations to managing operational risks and maintaining stakeholder trust. Yet, many organisations put off internal audits until something goes wrong. The truth is, waiting for a crisis is one of the costliest mistakes a business can make.

At Tritact® Consulting, we work with organisations across the UK to identify vulnerabilities before they become problems. In this article, we outline the top 5 signs your UK business needs an internal audit right now and what you can do about it.

What Is an Internal Audit?

What does an internal audit actually involve before we get to the warning signs? Internal auditing is an independent and objective appraisal of an organisation’s systems, processes, controls, and compliance (or non-compliance) with relevant regulations and standards. External audits are conducted by a third party for statutory requirements. In contrast, internal audits are a proactive management tool that aids in the improvement of performance, the reduction of risks, and the increase in accountability.

Being effective at internal auditing means being able to discover efficiencies and growth, as well as areas of concern.

Sign #1: You Have Encountered Unforeseen Financial Issues or Variations

Losses occurring that cannot be explained, budgets that have been exceeded, or financial records that are inconsistent are all clear indicators that an internal audit is overdue. Financial discrepancies are an indicator of deeper issues that are not likely to be resolved easily and may include poor internal controls, lack of proper oversight, or, in the worst-case scenario, fraud or the misappropriation of funds.

For UK businesses that are operating in a financial regulatory environment, a risk-based internal audit may be able to identify the breakdowns of controls, and the financial loss may be avoidable. Upfront identification of risks may also serve to avoid costly penalties from the HMRC or FCA.

Sign #2: Drastic Changes in Your Business

Change is a sign of good things to come. But sometimes change is good in the wrong way. Positive change can be disruptive, especially when the change has simply outgrown the systems and processes. Rapid growth can mean more locations, contracts, or staff, and mergers and acquisitions. It may mean a shift to new markets and businesses. Your existing controls may no longer be fit for purpose.

Accelerated growth can leave roles and responsibilities vague or overlapping. Positively, productive processes of a ten-member team may be completely unproductive for a one-hundred-member team. Poorly scaled processes negatively impact productivity. Process improvement audits can identify unproductive processes and systems, and suggest, for example, how to streamline work in audit compliance.

Sign #3: Problems With Compliance

Upscale, complexity, and rapid change in UK regulations impact productivity and make compliance an everyday, time-consuming hurdle. Compliance audits are essential when businesses receive regulatory notifications and warnings or when audits fail.

With Tritact® Consulting compliance audits, you will discover unregulated and ungoverned areas of your business and maintain systems and processes to assure compliance on a continuous basis.

Sign #4 Poor Employee Morale and Concerns Over Processes

Generally, it's the employees who identify process failures first. If employees have voiced concerns about processes being inefficient, the absence of accountability, or blurred lines concerning roles and responsibilities, or complaints and grievances are on the rise, and employee turnover is increasing, these may be signs of larger issues within the organisation.

A special-purpose audit can take a closer look at concerns involving management, processes, and communication within the organisation. Closing these gaps can improve the workplace environment employees want to be part of, lower operational risk, and keep talent in the organisation.

In the current UK jobs market, retaining skilled employees is difficult. Improving process health concerns employees as well.

Sign #5: It’s Been over 12 Months Since Your Last Internal Audit

This one is also simple. It is a known fact that many UK companies do not make it a habit to conduct regular internal audits. In fact, you may have blind spots that are draining your resources, reducing your efficiency, and/or exposing you to legal risk.

Conducting internal audits on a regular basis is not only a "best practice," but is necessary to comply with several standards and regulations. In order to gain an ISO certification, maintain your accreditations, and, of course, run a more effective organisation, an internal audit done once a year gives you the independent confirmation to make the right decisions.

Why Choose Tritact® Consulting for Your Internal Audit?

Our team of CQI & IRCA qualified auditors at Tritact® Consulting has sector-specific knowledge and experience, coupled with the advanced education you want for auditors. Our internal audit services for UK businesses include:

• Risk-based internal audits that assess the most critical risks to your business.
• Compliance audits that confirm you have met all necessary laws, regulations, and standards.
• Audits that confirm your processes are efficient and cost-effective.
• Audits that address specific concerns (IT security, environmental compliance, etc).

We strive to never have a cookie-cutter audit, which is easy to do. Each one of our audits is done for your specific business.

Proactive Solutions Before Problems Increase

Every lingering organisational problem becomes harder and more expensive to fix the longer it is ignored. Even if you do not see all the signs above and only want a little more peace of mind, a complete and unbiased examination of the situation is well overdue.

Internal audits are your best option right now.

Contact Tritact® Consulting to see how we can help your organisation remain strong and flexible.