Attention Entrepreneurial Small Business Owner (ESBO): Be Your own Internal Auditor

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School of Business


When advising an entrepreneur small business owner (ESBO) most consultants soon realize that most small businesses don't have anyone internally to "audit" the business. Typically these areas, entrepreneurs hip and auditing, are studied independently to the point that few entrepreneurial families appreciate the skills an internal auditor can offer. Can a "good" ESBO become more effective by adding auditing skills into their art and embrace the goals, functions, and skills of an internal auditor? This commentary explores that question by identifying the issues and differences between the entrepreneur-small business and the internal auditing function. Where the management function typically emphasizes conceptual skills, human skills, and technical skills, this paper suggests the addition of an auditing focus on the economy, efficiency, and effectiveness of the business would greatly enhance many entrepreneurial small businesses in their quest to improve both themselves and their enterprise. The small business owner's management function could become much more effective if owners would "crossover" and adopt certain goals, skills, and functions necessary to perform internal audit activities. ESBOs should not resist this cross-pollination application as these commonalities could be developed and applied at all levels of their organization. If cross-pollination across small businesses and the auditing function could occur, failure rates for ESBOS might significantly decline so that external auditors may seldom be needed. Instead of "show me the money, " most ESBOs should be "following the money." As such, this paper concludes with proven solutions on how to ESBOs can improve business operations by performing the dual roles of manager and internal auditor.

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