Assessing the Significance of Auditing Small Businesses and Organisations; a Case Study of Selected Organisations in Ghana

Abstract

Auditing is a necessary tool for business management; however, many small businesses and organisations ignore it. The lack of audits has caused the collapse of many of these businesses since probity and accountability are essential for the growth of businesses. The researcher, observes that small businesses lack the capacity to employ auditors, citing cost of audit fees as the reason. This invariably makes them more prone to fraud hence the collapse of their businesses. He therefore, resolved to analyse the effect that auditing small business have had on some organisations that he had personally audited over the years and make relevant recommendations to businesses. The research shows that small business are even more vulnerable because of lack of qualified accounting personnel in managing their books of accounts hence the need to employ auditors to evaluate the organisations activities. The research also shows that the presence of an auditor alone is a moral deterrent to fraudsters. The researcher recommends that small businesses should be educated on the importance of audits by stakeholders including finance professionals. Auditors should consider charging small businesses reasonably low audit fees to encourage them have their accounts audited. As observed in the case study, when the small businesses are audited they will begin to operate efficiently and the auditor will be able to charge economical fees as the businesses grow.