Related audit services

Audit is a service provided on a contractual basis by independent organizations, the purpose of which is to verify the reporting of an economic entity to confirm its reliability. In addition to the audit itself, audit organizations are given the right to provide other services by law. This topic is devoted to the article.

What does the auditor do

During the audit, the examiner thoroughly examines all aspects of the financial and economic processes involved in creating the economic result from the activities of the enterprise. In this case, “failures” in accounting, reserves for reducing costs, and the pros and cons of doing business can be identified. The conclusion may contain not only conclusions about the correctness of the financial statements, but also recommendations for optimizing activities.

Thus, audit and audit services are various areas of activity of an independent organization in the financial sphere, accounting and management accounting. Their activities are always aimed at increasing profits.

The activities of the auditor are contractual in nature. This means that a contract for the provision of audit services must be concluded between the inspector and the auditee.

Services

The main area of activity of independent audit companies is audit. It can be divided into types according to the period of the audit:

Initial, when the audit of the participant in the commodity-money relations is made for the first time.
Periodic, if the check is carried out at a time interval specified by the concluded contract.
Operational, carried out when such a situation arises, when it is required to evaluate the overall financial picture that has developed in the business in a short time.

If we consider the scope of activity as an object audited by a specialist, then the audit will be divided into special, price, tax, management, financial and compliance audits.

In addition to conducting an audit, independent auditors may also provide other services agreed upon by the customer. Such services of audit companies in the law are defined as related. They are not aimed at controlling or verifying activities, but strive to meet the objectives of helping business owners. Related audit services are designed to find reserves for improving financial performance and optimizing the economic activities of the customer organization. At the same time, the activity of a specialist is not only a verification one, but also a consulting one.

This activity involves the implementation of procedures compatible (or incompatible) with the conduct of verification activities for which an audit services agreement has been concluded.

Compatible

This type of service includes such work to optimize the financial side of the enterprise, which does not contradict the conduct of the audit of the subject. Together with the audit, the following services of audit organizations can be provided:

Consulting in the field of taxation, management, accounting, labor law and other areas related to the implementation by an economic entity of its activities.
Selection of qualified personnel for the customer and training of existing personnel.
Monitoring the accuracy of tax accounting, the calculation of mandatory payments.
Setting up accounting activities.
Calculation and assessment of financial indicators of production activities: liquidity, solvency and other components of the business.
Representation of the interests of the customer in various disputes with extrabudgetary funds or on tax issues, in customs and other services.
Scientific activity, implementation of research activities, design and publication of their results.
Assessment of the enterprise as a financial and property complex, determination of investment risks, preparation of a business plan.
Organization and conduct of training activities in the field of audit and accounting activities.

Services incompatible with audit

They turn out to be regardless of whether a check is carried out at this customer. The main thing is to conclude an agreement on the provision of audit services. They can be combined into three groups:

Accounting audit services, implying the implementation of activities at the enterprise on the formation of accounting and structuring the balance sheet, financial report and explanatory note to them.
Recovery of accounting of an economic entity.
Formation of tax and other declarations.

Kinds

In addition to the classification of compatibility with the audit, audit services are activities that are divided into services; actions that control and information.

Actions

This type of service implies the receipt by the business owner of specific results or documents, the formation of which is provided for by the assignment. It can be stated directly in the contract with the audit firm or be an addition to the main document.

Control Services

The provision of such services involves monitoring the compliance of various areas of financial activity of the property complex with the current legislation, other regulatory acts, the Tax and Labor Codes. It can also be monitored to ensure compliance of staff with their posts.

Information Services

Such services include advice on all matters relating to the scope of the audit firm. As well as conducting various types of training: compilation and publication of teaching materials, organization of seminars and trainings.

Contractual basis of relations with the auditor

Any audit services are components of entrepreneurial activity based on the conclusion of a contract for the provision of services for a fee. Such an agreement relates to civil law and must comply with the requirements for these documents. The contract legally formalizes the interaction between the audited entity and the audit specialist.

Next, we will get acquainted with the main sections of the concluded contract:

Preamble indicating the customer, contractor, their details, legal addresses and actors.
Subject of the contract. This section contains information about the specific order and commitment, the type and method of audit (if it is planned), the name of related services, requirements for them. This section also sets the deadline for order execution.
Rights and obligations of the contractor. This section of the contract describes the capabilities of the service provider and the requirements for their provision with specification of responsibility for the non-compliance of the services provided with the requirements of the economic entity. It provides all the details to which the auditor is entitled, as well as those points that he must observe.
Rights and obligations of the customer. This block provides for the obligations of the auditee to provide the auditor with all the required information and documentation, as well as the right to familiarize themselves with the intermediate results of the audit.
Settlement procedure and contract amount. Here, the nuances of payment for the services provided are clearly specified.The calculation date and the conditions for its implementation are established, the type of the document by which the calculation is made is determined.
Force majeure circumstances. This section provides for the responsibility of the parties in the event of unforeseen force of circumstances, as well as the procedure for resolving conflicts and disputes.
Confidentiality. In itself, the activities of a specialist already provide for the responsibility for maintaining confidentiality in the provision of audit services, whether related services or directly audit. Responsibility for the disclosure of information about the business entity that became known during its verification is established by law. The auditor is required to comply with the Code of Honor not only in the field of confidentiality, but also in other aspects of the activity.
Validity of the document and final provisions.
Signatures and details of the signatories.

Based on the foregoing, we can conclude that audit services are not only conducting activities to verify the accuracy of reports submitted by the enterprise, but also assisting business owners and assisting in the development of an economic entity.