Family businesses have unique characteristics in relation to other types of businesses, such as the proximity between its members, the influence of affective ties on decision-making and the involvement of family members in different areas of the company. As a result, auditing can be especially important in this line of business.
Family businesses face a series of challenges that can affect their performance and even their long-term continuity. Some of the biggest problems faced by these companies include family conflicts, inefficient management, lack of professionalization and succession problems. The audit can help to deal with these problems in several ways, identifying the conflicts and evaluating the company's management processes.
One of the great advantages of auditing family businesses is improving transparency. In family businesses, there can be a mix of personal and business finances, which can make financial information difficult to be transparent and accurate. The audit helps to separate personal finances from the company's finances, bringing more clarity about the company's financial situation and allowing for a more effective and conscious management of resources.
It also strengthens corporate governance, as auditing can help establish corporate governance practices in the family business, such as creating advisory boards or boards of directors with independent family members. This can contribute to the professionalization of management and reduce possible family conflicts in making important decisions.
In cases of succession, the audit can help the family business to plan the succession and transition of leadership, ensuring that the business is prepared for the passing of generations with good people management and strategic planning, in addition to guidance on how to prepare the company for succession, ensuring that the transition between generations is smooth and that the company is prepared to deal with possible challenges.
Research shows the importance of auditing family businesses, such as “The role of auditing in family firms: a review and suggestions for future research”, by Yasemin Kor and Sabine Rau, published in the Journal of Family Business Strategy, which suggests that the Auditing can help preserve the family business's reputation, reduce the risk of fraud, and improve financial performance.
In addition to bringing more credibility and transparency to the company's financial information, the audit increases the trust of stakeholders, such as customers, suppliers, investors and creditors and can be a very useful tool to help family businesses face their challenges and prepare for the future. By bringing more transparency, efficiency and professionalism to the company's management, auditing can help ensure its long-term continuity and success.
Get in touch with TATICCA – ALLINIAL GLOBAL, which works with integrated auditing services, internal audit, accounting, tax, corporate finance, financial advisory, risk advisory, technology, business consulting and training, for more information, visit www.taticca.com.br or e-mail taticca@taticca.com.br and learn more. Our company has certified methodologies for carrying out activities.