Home Finance & Investments Growth in voluntary audits as North East SMEs prepare for acquisition and...

Growth in voluntary audits as North East SMEs prepare for acquisition and investment

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Grahame Maughan, RG partner and Head of Audit & Assurance

Ryecroft Glenton (RG) is seeing an increasing interest from its clients in voluntary (non-statutory) audits as they prepare themselves for acquisition, investment and finance raising.

In the past 12 months, the Newcastle-based firm’s Audit & Assurance division has seen a growth in demand for assurance services from business owners.

Not only do investors and lenders have greater confidence in businesses that have undergone an audit, but an additional benefit is that the audit process flags up deficiencies in structural and operational processes, which can then be addressed before they are highlighted as problems during financial due diligence.

A number of clients who have chosen to undergo voluntary audits have done so as a consequence of feedback received following a Strategic Review carried out by RG’s Corporate Finance division (RGCF). Working closely with the firm’s Audit & Assurance division, RGCF plays an instrumental role in developing the strategic growth and potential value of businesses.

RG is also seeing an increase in instructions from third party lenders and institutional investors for the firm’s financial due diligence service which focuses on the bespoke requirements of each transaction.

Early engagement of RG’s Audit & Assurance advisory services following a Strategic Review allows a business sufficient time to implement systems and recruit new and additional key personnel where necessary to maximise business potential and enhance value.

Grahame Maughan, RG partner and Head of Audit & Assurance, said: “The North East has a strong and diverse group of innovative SME businesses that are attracting interest from investors and acquirers. These businesses are either gearing up for growth or recognise that a trade sale is a positive opportunity to secure the future of their business and its workforce if they are planning an exit.

“The growth in non-statutory audits is a good indicator of this trend. We are seeing SMEs voluntarily adopting an audit as part of their strategy for readying themselves for sale, inward investment and finance raising. This should also mean that financial due diligence undertaken at the point of transaction doesn’t produce any unpleasant surprises.”