An audit is an entrepreneurial activity aimed at conducting an independent examination of the financial and accounting statements of organizations, as well as individual entrepreneurs. What does this mean? Types of audit and their characteristics will be presented in this article.
Audit objectives
The main purpose of the audit is to confirm the reliability of the financial statements of the organization, as well as to verify the compliance of the accounting procedure with Russian legislation.
What are the types of audit, classification and characteristics?
The essence of the audit from an economic point of view can be explained by the growing need of organizations for a qualified assessment of the reliability of the information provided used in the financial statements. The auditor's opinion on the organization’s reporting further raises the confidence of other interested parties.
Users of financial statements
The users of the organization’s financial statements are:
1. Investors and their official representatives.
2. Workers.
3. Lenders.
4. Customers and buyers.
5. Contractors and suppliers.
6. Representatives of the authorities.
7. The public.
The types, classification and objectives of the audit are closely related.
After the transition to a market economy, it is gaining momentum in our country. In international practice, it is used in almost all areas of commercial activity. For our country, this phenomenon is still new.
Types of audit and their characteristics
There are several options for separating audits by type. According to international practice, the following types are distinguished:
1. Financial. Financial resources are checked, as well as support and compliance with the requirements and principles of financial statements.
2. Operational. It concerns the procedures and working methods of the economic system, as well as checking the effectiveness and productivity of organizational activities.
3. Audit for compliance with legislation. Reporting should be prepared in accordance with the rules, standards and norms provided for at the legislative level.
4. Special. Based on the results of this audit, an expert opinion is drawn up confirming the accuracy of the information transmitted to the other party. Types of audit and their characteristics are not limited to this.
In Russia
In Russian practice, the separation of audits into types occurs somewhat differently:
1. Audit of financial statements. It is engaged in verification of accounting and gives an assessment of its reliability and reliability.
2. Tax. Provides an assessment of compliance with tax legislation.
3. Compliance audit. Checking a specific field of activity, economic or financial, for its compliance with legal conditions and regulations.
4. Price. Checks the appropriateness of prices set to order.
5. Audit of economic activity.
6. Special audit. Assessment of specific areas of activity of the audited organization.
7. Management. Provides verification of the management and organization of the enterprise and the use of resources.
We examined the types of audit and their characteristics.
Classification
The classification of the audit involves the separation of its types according to various parameters. So, according to the category of auditors:
1. State.
2. Independent.
3. Internal.
According to the current legislation, an audit can be:
1. Mandatory.Validation of the financial statements of an individual entrepreneur or organization in cases established by federal law.
2. Proactive. This type of verification is carried out by the will of the subject of the economy, that is, initiated by the organization itself.
According to the frequency of the conduct:
1. An initial audit when the audit is performed for the first time.
2. Repeated. Types of audit and implementation conditions do not end there.
Depending on the objectives pursued by the audit, we can distinguish:
1. Financial.
2. Special or certification.
3. For compliance with Russian law.
4. The operating room.
5. Tax.
6. Management.
7. Audit of financial statements.
The focus of activity is usually distinguished:
1. General.
2. Banking.
3. Audit of insurance organizations.
4. Audit of extrabudgetary funds and investment institutions.
The nature and types of audit interest many.
Audit methods
In an audit, in order to collect the necessary information, methods are used that are established by internal standards and are fully consistent with the goals and objectives, as well as the agreements. In Russia, control and auditing and audit practice apply the following methods in their work. Let's consider them in more detail.
Actual control
Still these methods are called organoleptic and include observation, inventory and expert evaluation.
· Inventory is not carried out by the auditor personally. Although mandatory by law is its presence and visual observation and assessment of the accuracy of the information presented in annual reports.
· Visual observation refers to questioning, testing and examination of objects. Depending on the requirements of the auditor, photography, timing of the working day, etc. may also be used. However, all of the above is more suitable for internal audit.
· Assessment of an expert involves technological control, experiment, control measurement of work, various examinations, chemical and laboratory analyzes, etc. What is obvious, this audit should take place with the invitation of external experts.
Documentary Methods
This group includes:
· The study of documents is most often carried out when checking documents related to financial statements. Documents are checked in form and content. The form assumes the presence in the reporting of certain information, namely dates, details, numbers, etc. That is, in fact, the correctness of the paperwork is checked in accordance with generally accepted regulations. The tasks of the auditor also include checking the correctness of the various journals of document accounting, as well as corrections in documents, which for the most part are unacceptable when it comes to bank or cash securities. As for the content, in this case, the auditor's tasks include checking for compliance of the organization’s activities with all of these operations, as well as compliance with accounting requirements. No less important is the absence of contradictions in the operations to the current legislation.
· Information modeling. It includes mutual control of operations, counter checks, control reconciliations of balance interconnections, analytical analysis of submitted documents, checks and tracking of documents, logical checks, reverse accounts, etc. Mutual control of operations involves checking the organization for any inconsistencies between its actions. Analytical verification of documentation involves checking arithmetic calculations. Verification of documents is carried out in order to determine the availability of all primary reports. Tracking allows you to check the correctness of the primary accounting documents reflected in the final registers and financial statements.Counter checks are the auditor’s appeal to the auditee in order to provide information from third parties. The audited entity is required to provide such information. In the absence of analytical accounting, control comparisons are made. This method allows you to identify errors in the use of assets.
· In-house checks are used to analyze the relationship of information in accounting registers and the general ledger, as well as various types of reporting, including financial.
Settlement and analytical methods
This category involves the analysis of documentation from an economic point of view, including analytical procedures, economic and mathematical methods and statistical calculations.
The article provides a detailed description of the main types and objectives of the audit.
Conclusion
Thus, audit is an integral part of the life of each enterprise, therefore it is very important to understand its essence and the methods used. Recently, a quality audit has gained great popularity. It implies an assessment of all spheres and directions of entrepreneurial activity of the organization, strategy and efficiency of doing business. Also, in the process of quality audit, an analysis is made of the competitiveness of the company, as well as the demand for its products.
The legal entity must be clearly aware of the goals and objectives of the audit. It should be borne in mind that, in essence, the result of the check is an assessment of a specialist of a certain company, and not an irrefutable fact. The auditor may also make certain inaccuracies in his work. For this reason, if you disagree with the decision of the audit office, you should go to court.
We examined the audit related services, types and characteristics.