The objective of every company or business is to improve on a day-to-day basis and try to achieve the objectives set in the short, medium and long term. To achieve this, hiring an external auditor who is able to make a complete diagnosis of the different departments of the company, is a possibility to take into account, since it will favor the growth of your business and allow you to solve any area that may present difficulties.
What is an external auditor?
An external auditor is a person who is part of an audit firm or firm, who offers its services to a firm for review and audit independently,with the aim of proposing alternatives that optimize the use of resources and seek the most effective solutions that favor the growth of the business.
The external auditor must be registered in the Official Register of Auditors (ROAC) of the Institute of Accounting and Auditing (ICAC).
The objective of hiring an external auditor is that he can review and analyze the operation of a company, in order to detect possible anomalies or deficiencies that are harming its viability and growth. Being a person outside the naturalness of the company, you can perform the audit in an objective way, looking for solutions that correct and improve a business project, always complying with the law.
That said, conducting an external audit should not be understood as an additional expense for the company, but as an investment that will help optimize management and improve the operation of the business,through the knowledge and experience of a professional external auditor, completely independently.
When to hire an external auditor?
The hiring of an external auditor by a company can be voluntary or mandatory,and there are certain reasons that can lead a company to want to perform an audit.
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When an audit is carried out voluntarily, it is done with the aim of seeking the transparency and reliability of the company itself,making a complete diagnosis of the different areas of operation that will allow to detect possible failures that are harming the correct management and the good functioning.
But there are other situations in which the audit must be done in a mandatory way, to comply with the different parameters set in the Commercial Legislation.
The external audit is mandatory for all those companies that have more than 2.8 million assets, 5.7 million turnover or a workforce with more than 50 workers. If two of these three aspects occur over two years, the company will be obliged to be audited.
Royal Decree 1517/2011, of 31 October, includes all those criteria that oblige a company to submit to an external audit.
On the other hand, the total cost of an external audit will depend on the volume of each business.
Advantages of performing an external audit
The main advantage of performing an external audit is that it will allow you to know the state in which your business is,taking the appropriate measures to solve any problem that may have appeared when performing the audit.
If the report made by the external auditor is favorable, it will mean that the operation of the company is the correct one to achieve the objectives set. It shall also certify that the annual accounts reflect the true economic situation of the undertaking.
This report will be very useful if the company wants to obtain financing from third parties, seeks to receive some type of subsidy or go to tenders and / or public tenders.
In addition, the external auditor will evaluate the company’s internal control system, communicating any type of weakness found. It should be borne in mind that an auditor will act in turn as an advisor,recommending possible improvement actions that can solve these weaknesses, complying at all times with current legislation.
In short, the hiring of an external auditor is highly beneficial to know the state in which a company is, being recommended, especially for those companies that are in the process of expansion or growth; since they will have the opinion of an expert that will allow them to improve the management of the business.
An external auditor is a person totally independent of a company, who will be in charge of analyzing the different areas of operation, with the aim of detecting possible management failures and looking for the best solutions to solve them.
At AYCE Laborytax we have a large team of audit experts for companies,which will help you build a healthy, strong and perfectly managed company.