Over the years, family businesses have done a good job at mitigating such market risks. In our experience, major contributing factors are their willingness to focus on the longer term and their ability to draw upon the family, including the broader family members, to help them navigate through tough times. Therefore, need for broader and more relevant assurance has never been greater and for family businesses this is certainly true.
Financial risks have become altogether more complex, and there are constant reminders that non-financial risks can have the largest financial consequences.
For owners of family businesses that are operated and controlled by non-family members, external assurance is of particular importance.
There are many issues outside of the area covered by the traditional audit that you might want to consider when taking a more proactive approach to risk management.
- Is the management information and key performance metrics that you use to run the business accurate?
- Are you equally confident about the quality of non-financial information as that included within your accounting systems?
- Do you need greater assurance over your investment decisions for your bank, board or audit committee, the quality of your data, or the robustness of your performance against forecasts? Are you in need of more assurance before making an acquisition, or need to minimise the risk of capital loss or business failure after an acquisition?
- Do you need ethical assurance over your supply chain processes and controls to avoid reputational damage?
In order to tackle these crucial aspects of your business you need to remain proactive, so as to anticipate how any changes in the macro environment may impact you, your family and your business.
By ensuring that you have the best people, systems and processes embedded in your business you will be in a good position to tackle the risks associated with being part of a family business.
How we can help
As you might expect, a KPMG audit is performed in line with our core values, which include integrity, and provides a robust and independent opinion. Equally, our clear and continuous commitment to quality across all of our teams may not surprise you; but what about our objective of innovation and boldness? These equally are core strengths that help our audit teams challenge assumptions, provide deeper insights and deliver an efficient assurance service, both within and beyond the financial audit.
Our audit methodology is designed to focus on the risks that might have material impact on your financial statements; this means that we will test the controls you have established to mitigate the financial statement risk and also communicate potential business risks to you so that you are better prepared to anticipate change.
The high quality of communication is a particular feature of KPMG’s audit process. Underpinning our audit approach is a commitment to no surprises, with early proactive advice on any potential issues.
The amount of senior time we spend on site and the frequent and interactive exchange of views builds a stronger working relationship, brings fresh perspectives and the early identification of emerging issues.
KPMG is confident in the technical abilities of our lead engagement partners, who have extensive experience, have worked with family businesses of all sizes and have the authority to make accounting decisions that commit the firm. This empowerment of our partners, the collegiate nature of the firm and regular consultation with our clients means that our response to accounting issues that arise during the audit is prompt, decisive and consistent.
Finally, we recognise that the financial statement audit can provide invaluable business insight. But increasingly, family business leaders need and can benefit from assurance that goes beyond the traditional external audit. As auditors we can apply the same skills, rigour and robust challenge to many areas of your business that can be quantified and measured through our assurance services.