Impact of Regular Audit Practices on Financial Health among Tulip Bulb Suppliers in the Netherlands: An In-depth Study

This in-depth study aimed to evaluate the effect of regular audit practices on the financial health of tulip bulb suppliers in the Netherlands. Data was collated from 150 tulip bulb enterprises, representing both large-scale suppliers and smaller family-run operations, spanning a period of 10 years (2015-2020). To assess financial health, key indicators such as liquidity ratios, solvency ratios, and profitability ratios were considered. Statistical analysis revealed that companies subjected to regular audit practices demonstrated a 15% higher median profitability ratio compared to those that had infrequent or no audits. Furthermore, liquidity ratios, indicative of a company's short-term financial health, were on average 18% more favorable among frequently audited suppliers, signifying a better capacity to cover short-term liabilities with short-term assets. In contrast, solvency ratios, which reflect long-term financial health, showed a less pronounced difference between the two groups, with regularly audited firms having only a 5% advantage. Qualitative data, gathered through interviews with CEOs and CFOs of the tulip suppliers, provided insights into the observed statistical results. A significant number of respondents (82%) believed that regular audits instilled a sense of financial discipline and accountability, subsequently impacting their financial decisions and strategies favorably. In conclusion, the research shows the positive implications of regular audit practices on the financial health of tulip bulb suppliers in the Netherlands. While profitability and liquidity were notably better among those subjected to consistent audits, the influence on long-term solvency was less pronounced. Keywords: Regular Audit Practices, Financial Health, Tulip Bulb Suppliers, Netherlands, Profitability Ratios