Recovery Audits – Benefits Beyond The Recovery Of Lost Profits
Most companies and organizations will hire a recovery audit firm in order to both identify and recover lost profits. But immediately after the agreement begins, the emphasis of the recovery audit engagement usually steers strictly towards the recovery of lost profits. This is certainly understandable. Why not take back from the vendors and suppliers the funds that are rightfully yours. However, the identification of the internal control deficiencies that are behind the profit leakage should be considered paramount to the engagement. Why allow your vendor and supplier community to have use of those lost funds.
Our audit team at Strategic Audit Solutions has been performing recovery audits for over four decades, recovering over $5 billion in lost profits. With an average recovery percentage rate of one tenth of one percent, these lost profits can be extremely significant to a company or organization. The size and magnitude of these recovered lost profits can provide funding for retail new store openings or store renovations, funding for research and development, operational and G&A expenses. In many cases, companies tend to partner with us during the annual budget process as a revenue source.
The value of a recovery audit engagement can be shown to extend well beyond the recovery of lost profits. Our recovery audit team at Strategic Audit Solutions analyzes massive amounts of data and reviews system processes in order to identify the root cause of the profit leakage. Throughout each recovery audit engagement and at its conclusion, SAS partners with our clients’ Internal Audit Departments, providing our clients with continuous reporting and a management report outlining detailed explanations into the root causes and internal control deficiencies for these lost funds as well as recommendations for improving the internal control process.
With the enactment of the Sarbanes-Oxley Act in 2002, enhancing corporate internal and financial reporting controls have become essential for public companies. Why wait for a recovery audit firm to recover your lost funds after the dollars have been sent to the vendors or the suppliers? Why provide your vendors and suppliers with the ability to utilize your money until they are recovered potentially years later? Become proactive in the funds management process and utilize your recovery audit firm to identify those profit leakage areas, allowing your company to strengthen the internal controls and retain profits in house. Let us at Strategic Audit Solutions help guide the way.