Understanding the Return on Investment (ROI) of Regular Business Audits
Whether internal or external, audits have become crucial when running a modern business. Businesses can use these audits to identify issues within their processes and systems, ensure compliance with specific regulations, and much more.
Like everything else involved in running a successful business, regular audits cost time and money. This means businesses must be able to get a return on their investment if they conduct them regularly. The return on investment (ROI) of regular audits can be substantial, but it depends on the specific audit and its outcomes. Let’s explore several ways regular business audits can produce immense value.
Regular Audits Can Protect Crucial Business and Customer Data
Data is one of the most valuable assets for modern businesses. For this reason, it has become a target for malicious actors who exploit systems to get access to it. The damage that can occur when a business mishandles its data or that of its customers is often devastating, so it must protect it at all times.
Even with various security practices, businesses should conduct regular audits to ensure their systems, processes, and policies hold up. These audits are typically a collaborative effort between a business and external parties who evaluate data management practices to ensure compliance.
Cybersecurity audits can help, and so can SOC 2 audits. The former are conducted by cybersecurity professionals, while independent audit firms conduct the latter. Businesses can make the audits go better and produce the best results by using the right software.
SOC 2 compliance software, for example, helps businesses achieve SOC 2 compliance which shows an organization has all the necessary controls to secure customer data. The right SOC compliance software also makes evidence gathering, gap identification, and collaboration between different parties much easier during the audit process.
Audits Can Identify and Help Protect Fraud
Fraud is a serious issue for any business that faces it, and it can lead to significant financial losses and reputational damage. Regular audits can be a crucial tool for discovering fraudulent activities earlier. By doing so, they can minimize the losses businesses incur.
With the Association of Certified Fraud Examiners (ACFE) saying the typical business loses over 5% of its revenue through fraud annually, regular audits to detect and stop it now play a much bigger role in protecting businesses. Detecting such fraud through audits can yield a very high return on investment for medium to large businesses with revenues in the millions or tens of millions of dollars.
Regular Audits Ensure Regulatory Compliance
In addition to complying with data protection regulations, businesses are required to comply with many other regulations. Failure to do so can result in costly fines, penalties, and legal challenges. The cost of remaining non-compliant is so high financially and reputationally that businesses cannot afford to skip the audits that keep them compliant.
The return on investment for specific types of audits will vary from one business to the next, but the available evidence shows that it tends to be very high. With the benefits outweighing the costs or potential losses from not doing them, audits are a crucial investment for businesses that wish to maintain and improve their health and performance. They are also crucial for those who want to avoid the many issues that could arise by not conducting regular audits to identify problems early.
