Financial Audit

Financial Audit

Financial Auditing of your company will show Financial stability and will help you in generating new funds. Our professionals will help you grow in the market. A financial audit is an independent, objective evaluation of an organization's financial reports and financial reporting processes. The primary purpose of financial audits is to give regulators, investors, directors, and managers reasonable assurance that financial statements are accurate and complete.
Audits have become increasingly common as the complexity of the two primary accounting frameworks, Generally Accepted Accounting Principles and International Financial Reporting Standards, have increased, and because there has been an ongoing series of disclosures of fraudulent reporting by major companies.

Primary Stage of an Audit

  1. Planning And Risk Assessment
  2. Involves gaining of the business understanding of the business and business environment in which it operates, and using this information to asses whether there may be risk that could impact the financial statements.
  3. Internal Control Testing
  4. Involves the assessment of the effectiveness of an entity’s suite of control, concentrating on such areas as proper authorisation, safeguarding of assets, and the segregation of duties. This can involve an array of tests conducted on a sampling of transactions to determine the degree of control effectiveness.
  5. Sustantive Procedure
    •   Analysis
    •   Cash
    •   Marketable securities
    •   Accounts receivable
    •   Inventory
    •   Fixed assets
    •   Account payable
    •   Accrued expenses
    •   Debt
    •   Revenue
    •   Expenses

Characteristics

  1. Importance
    • Enhances quality of business process
    • An audited financial statement provides a high, but not an absolute level of assurance that’s the amount included in the company’s financial statements and notes to accounts are free from material mis-statements.
    • An unqualified audit report provides the user an audit opinion which states that financial statements are showing true and fair view in all material aspects and are in accordance with generally accepted accounting principles.
    • Financial statement audit provides a level of consistency in financial reporting that user of the financial statements can rely on when analysing different companies and decision making.

  2. Responsibility
    • Below are the Responsibility for the financial statements-
    • The management is responsible for maintaining an up to date and proper accounting system and finally to prepare financial statements.
    • The auditor is responsible for forming and expressing an opinion on the financial statements.
    • The audit of the financial statement does not relieve the management of its responsibility.
  3. Scope
    • The auditor decides the scope of his audit having regards to;
    • The requirement of the relevant legislation
    • The pronouncements of the Institute
    • Terms of engagement
    • However, the terms of engagement cannot supersede the pronouncement of the institute or the provisions of relevant legislation.

Principles

  • Integrity, objectivity and independence.
  • Confidentiality
  • Skill and competence.
  • Work performed by others.
  • Documentation.
  • Planning
  • Audit evidence.
  • Accounting system and internal control.
  • Audit conclusion and reporting.

FAQ's

    Audit are typically schedule for three months from beginning to end, which includes four weeks of planning, four weeks of fieldwork, and four weeks of compiling the audit reports.

The audit can conduct internally by employees of the organisation, or externally by an outside firm.

An audit examines your business financial records to verify they are accurate. This is done through a systematic review of your transactions. Audit look at things like your financial statements and accounting books for small business. Auditors write audit reports to detail what they found during the process.

Audit evidence is obtained by auditor during a financial audit and recorded in audit working papers.

There are four types of audit reports that issued by auditors on financial statements. Those audit report includes unqualified audit report, qualified audit report, disclaimer audit report, and adverse audit report.

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