All You Need To Know About Audit Reports
Every audit serves a purpose and the best result of any audit is a comprehensive and well prepared audit report.
Every audit serves a purpose and the best result of any audit is a comprehensive and well prepared audit report. Audit reports are the ultimate ‘product’ of an audit, and must be a useful account of the findings to truly add value, confirm copmpliance and to manage change in a company. Having a comprehensive audit report at the end of an audit has positive impacts on the growth and reputation of a business.
Let us guide you more on what a audit report is and the various purposes it may serve.
What is an Audit Report?
An audit report is the final result of an audit. It is prepared by the auditor and includes a comprehensive account of the audit and the audit findings to show the current compliance position of the company. It is also helpful to gauge any improvement opportunities for the company.
Who is the Target Audience for an Audit Report?
An audit report is used by various individuals and organisations that are connected to a company. The primary target audience for an audit report includes:
· First Party – Internal Audits within the Company
Well performing companies will have implemented their own ‘internal audits’. These are often called ‘First Party’ audits, because it is the organisation additing themselves. Though the auditors will be independent of the area or activity they are auditing, they are still employees, so not truly independent of the outcome.
Internal audits are often undertaken by companies where they want to detect internal issues before they become issues for their customers. Most companies that seek certification of their management systems will be required to conduct internal audits to conform to the certification standard.
· Second Party – Customers and Suppliers
Some customers may insist that as part of the supply contract that they be able to conduct audits of their suppliers. This is particularly common where the customer has an increased risk and will need to check that certain activities or project deliverables are in place and on track. These audits help reduce the customer risk and protect their reputation.
· Third Party – The Independent Audit
Third party audits are the most independent type of audit, where the auditor and the auditing company have no financial or strategic interest in the outcome of the audit. Independent audits are often prepared to an independent standard, and audit reports and certificates of compliance can be used by a wide audience as an independent benchmark of a company’s performance.
What are the Advantages of an Audit Report?
An audit report works as evidence of the accuracy, authenticity, and reliability of a company. The major advantages include:
- Helps prove the integrity of the operation to the management and other stakeholders
- Helps evaluate the activities of the suppliers to a business
- Helps identify the compliance of processes of a company
- Helps demonstrate compliance with external standards
What are the Limitations of an Audit Report?
Just like every other business function, preparing audit reports have their limitations too. Some of the most common limitations of audit reports include:
- Preparing an audit report is time-consuming
- The quality of an audit report is largely related to the auditor conducting the audit
- The auditor has full access to all the information and personnel they require
- It is challenging for auditors to have the experience and skill to cover all types of risks and activities of the business.
How can Mobiom Help with Audit Reports?
Mobiom compliance audit software is one of the best auditing software that helps companies manage their compliance regime and produce robust audit reports. It has workflows to simplify the auditing procedure right from requesting an audit, booking audit resources, selecting the right auditor, checklist preparation, generating reports, and through to the completion of the audit.
This cloud-based compliance management system helps you minimise the time and efforts taken to produce effective audit reports that are crucial for guided decision-making. Automation helps overcome the shortages of the traditional paper-based auditing system.