Each head of a large enterprise must be sure that all its employees are responsible, qualified and reliable. But often even professionals make mistakes that can lead to the prosecution of the company. Therefore, periodically require an audit of the financial statements of the enterprise. It is implemented by independent experts with the necessary knowledge and qualifications, which allows them to find even the smallest errors in reporting, various violations or even fraudulent schemes.
Audit concept
Accounting audit and analysis of enterprise reporting are presented by a special audit of the company. For this, an independent audit organization is invited. The main purpose of this process is to identify all errors and inaccuracies in the documentation.
The procedure may be voluntary or mandatory. In the first case, the head of the company independently decides to invite specialists for verification. The mandatory procedure is carried out by tax experts, and if any errors are detected, the company is held liable.
Types of Checks
There are several types of audits of financial statements. Each variety has its own nuances:
- Mandatory. The audit is carried out annually in companies, and without a report, the head of the enterprise will not be able to continue operations.
- Proactive. Research is being carried out on the initiative of the enterprise management, who wants to make sure that there are no problems in reporting. Most often, the procedure is implemented before tax audits. The study may be carried out by employees of the enterprise or invited specialists. If there are suspicions that the accountant uses various fraudulent schemes, then usually this assessment is a surprise to the employees of the company.
- Solid. They suggest studying all the documentation in the company in different areas of activity. This leads to the fact that the procedure is laborious, time consuming and complex. But due to such a study, the activities of the company are thoroughly studied, which allows us to identify numerous violations in its work.
- Selective. They are the most common and not too complicated. Only documents for a certain period of time or in one direction of the company’s work are checked. Based on the information received, a report is prepared on the work of the company as a whole.
- Integrated. They consist in studying all the documentation, but for a limited period of time.
- Thematic. Only a certain set of documents related to a specific field of work or topic is involved during the audit. For example, the correctness of payroll is often checked.
Company managers can use the help of their own employees to complete the process, but in order to get truly relevant and reliable results, it is recommended to contact independent auditors. The specific form of the audit of the financial statements of the enterprise is chosen by the director himself, if the procedure is voluntary. If the audit is conducted by the tax office, then the most commonly used comprehensive study.
Reasons for voluntary verification
Every entrepreneur should know what it is: an audit of financial statements. The procedure is carried out by specialists who are well versed in different reports to make sure that there are no violations and errors.
The leader can independently initiate the study. There can be many different reasons for this:
- the director wants to check the competence and reliability of his employees, since the check can reveal not only random errors, but also a deliberate distortion of facts, the main purpose of which is to profit and implement fraudulent schemes;
- owners suspect that the accounting department intentionally brings the company into bankruptcy;
- changes in the organizational structure of the organization are planned, for example, preparations are underway for a merger or merger with another company;
- check is carried out before the preparation of the annual report;
- the chief accountant of the enterprise is replaced, so the new specialist wants to be sure that there are no serious violations in the existing documentation.
Usually a voluntary audit of the financial statements of the enterprise is carried out once a year. The procedure is performed before the preparation of the annual report.
Targets and goals
The main purpose of the audit of financial statements is to verify the correctness of the compilation of various reports and documents. Based on the performed procedure, the appraiser provides the head of the enterprise with a special opinion, which indicates which violations and errors have been identified, and also indicates whether the documentation meets the requirements of the law.
Additionally, many other tasks are solved using the audit of financial statements. The main goal is to check the accountants of the company, but additional tasks are:
- the control system at the enterprise is analyzed;
- it is checked whether various reports and documents comply with the internal regulatory acts of the company;
- it is studied how correctly and relevantly recorded in the documents business transactions performed by the company;
- earlier studies are analyzed and summarized to determine what exactly affected the occurrence of errors in the documentation.
The timing and other parameters of the audit depend on the type of audit and the goals that are achieved through this procedure.
Research results
An audit of the financial statements of the enterprise allows you to identify the numerous problems that exist in the company. Therefore, according to the results of this process, the head of the company may encounter the following results:
- revealed fraud on the part of various employees of the organization, theft of property or major shortages;
- determines how correctly the financial accounting was conducted in the company;
- preparations are made for verification by the tax inspectorate, so management can be confident that no serious violations will be detected;
- all problems in reports are revealed.
Therefore, audits are mandatory events for any company.
When is an audit mandatory?
Based on the provisions of Federal Law No. 307, there is a special list of companies in which an audit must be carried out with a certain frequency. These include different exchanges, which may be stock or commodity, as well as banks or insurance companies. Additionally, this includes funds that may be charitable, investment or non-state pension funds.
They must annually publish their statements in open sources, so they must make sure in advance that all information is up to date and valid. For this, an audit of the financial statements of the enterprise is given.
Additionally, the procedure is carried out by companies whose annual revenue exceeds 400 million rubles. The exceptions are municipal enterprises, agricultural cooperatives and government bodies.
Who does the verification?
An audit of the financial statements of an enterprise must be carried out by professionals who are not interested in the results of such a study. Depending on the subject involved in the process, the following types of assessment are distinguished:
- external involves the use of the services of special audit companies that are in no way connected with the accountants of the audited organization;
- internal is to attract employees of the enterprise, so it is likely that the results will be distorted in favor of certain workers.
The results of the internal audit cannot be used for any purpose, therefore they are applied only personally by the enterprise management. If the director of the company doubts the fidelity and competence of employees, then it is advisable to use an external audit.
Who is included in the working group?
The correct procedure for conducting an audit of financial statements is to create a special working group. It includes specialists with the necessary qualifications and experience in similar audits. Be sure to include professionals:
- auditors;
- consultants;
- quality controllers.
Direct verification is carried out by auditors. They can communicate with company employees, study received documents, reports, registers and other papers. The controller should make sure that the audit services provided comply with the requirements of the law and standards of this activity.
Consultants who may be external or internal are involved when the need arises. They are usually represented by lawyers or economists.
Process steps
How are financial statements audited? This procedure is divided into several successive stages:
- Planning. Auditors are invited to the company for research. Information is provided to specialists regarding the direction and characteristics of the enterprise. The nuances of activity, the automation system and financial control are evaluated. A research plan is being formed, and a contract is concluded between the two parties, listing all the rights and obligations of each participant.
- Direct verification of documents. For this, auditors are provided with financial statements. Based on the process, all errors, distortions and violations are identified. Auditors use a variety of methods, such as collecting data, analyzing information, examining documentation, recounting assets, and other techniques.
- Drawing up a conclusion. The auditor, based on the results of his work, forms a special opinion. It indicates when exactly the checks were carried out, what violations were identified, what documents were examined, and often recommendations are made for the manager.
Various documents are subject to verification, which include tax returns, financial statements, explanatory notes, inventory sheets and other papers.
Rules for drawing up an opinion
Based on the results of the study, a verifying conclusion is drawn up. It is presented by an official document, including the opinion of the audit company on the reliability of the studied documentation. It includes information:
- The name and details of the company in respect of which the audit was made shall be registered;
- the type of the study is indicated;
- the studied documents are given in the organization;
- lists all identified errors and shortcomings;
- recommendations are provided for company management;
- often information is included in the document about the reasons for which one or another discrepancy could arise, which often leads to the fact that some employees of the organization are held liable for fraudulent activities.
This conclusion is transmitted to the direct customer represented by the head of the enterprise. Based on this document, you can understand how effective was the audit of the financial statements of the enterprise. An example of this conclusion is located below.
Service cost
If an independent audit company is invited to study, the management of the organization should prepare for certain expenses, since such a service is paid. The price of the audit of the financial statements of the enterprise depends on the complexity of the work performed and the number of documents being checked.
All the work of specialists is divided into several small tasks that require a high qualification examiner and certain skills. It is preliminary estimated how much time you will have to spend on the process. Due to the calculations and analysis, the optimal cost of the service is determined.
Therefore, before concluding an agreement, each audit firm pre-evaluates the amount of work and studies the specifics of the company. After that, the cost of the service is determined, and it can vary from 2 to 100 thousand rubles.
Conclusion
Audits can identify various violations and problems in the existing enterprise reporting. Research can be internal or external, complex or selective. The procedure is performed exclusively by experienced professionals.
According to the results of the study, a conclusion is issued to the company's management containing information about all identified errors and violations. Based on the data received, the company can prepare for a tax audit or get rid of unskilled workers.