AUDITING

Importance of Auditing

An Audit is a powerful tool for the Business and should always be seen as an investment in the Organization, to find ways to Safeguard Assets, Operate Efficiently, keep Fraud far away, Reduce Inefficiency and make sure Procedures are in place to keep Financial Information Secure. Auditing also ensures an Organization’s Financial Operations comply with the Law. It also plays a key role to help build trust in information and establish its accuracy.

They are developed to provide useful Information for some of the following Users:

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Shareholders

Creditors

Government Entities

Customers

Suppliers

Partners

Types of Audits

Accounting Professionals perform several types of Auditing. Audits can have different purposes and examine different Departments in a Company. When conducting Audits, Accounting Professionals employ a variety of strategies to produce accurate results.

External Audits

While Internal Audits focus on Business Practices and Risks, External Audits focus on determining the accuracy and thoroughness of an Organization’s Financial Records and issuing an opinion. While the purpose of an Internal Audit is to answer questions a Company may have about its Operations and give Guidance to Management, the purpose of an External Audit is to Provide Information to Entities Outside the Organization, such as Lenders and Investors, about the accuracy of Financial Statements. The standards for each type of Audit reflect the different objectives.

Financial Audits

Financial Audits involve examining an Organization’s Financial Statements and Records in depth to assess whether they are correct and complete. Financial Audits examine Procedures, Transactions and Balance Sheets. Auditors may conduct a number of Tests, or Audit Procedures, during a Financial Audit. They may also compare different sets of Financial Information to measure Consistency and Continuity as a tool to detect Inaccurate or Fraudulent Reporting.

Investors, Lenders and Creditors rely on the results of a Financial Audit as proof that the Company’s Records are correct. While most Financial Audits focus on Financial Statements, they can target other areas, such as Tax Records, among others.

Compliance Audits

Typically, Organizations must comply with State and Federal Regulations. These Regulations can relate to Health Insurance, Occupational Safety and Financial Reporting, for example. To ensure Compliance, Companies put into place Compliance Programs. Compliance Audits review an Organization’s Policies and Procedures and assess the effectiveness of its Compliance Programs.

Compliance Audits can also assess an Organization’s level of Compliance with the following:

The Terms of its Contracts
Shareholder Distributions
IRS Regulations
Laws concerning payment of Workers’ Compensation

Operational Audits

These Audits determine the effectiveness of its Procedures, Operations and Planning Processes. They also assess Company Goals. Operational Audits help a Company identify ways to improve Program Performance. This type of Audit also points out ways to lower expenses.

Operational Audits can include:

Assessing if Regulatory and Organizational Goals are being accomplished
Evaluating if a Program is achieving its intended Objectives
Determining if Expenses comply with Law, Contracts or Agreements

IRS Audits

Never fear an IRS Audit, with an ally like us! When you receive a letter from the Internal Revenue Service telling you that they’re going to Audit your Business or Personal Tax Returns, it can send a message of fear to You and your Team. The purpose of an IRS Audit is to examine your Returns for errors or Omissions. The IRS can be relentless when pursuing Taxes Owed, but we have managed many cases like these, and there is nothing to fear about.