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INTRODUCTION:
The Importance of Audits in Financial Contexts and the Need for a Successful Audit
Audits are conducted to identify and assess the risks that a company may be exposed to.
The process is vigorous, and if it is not done properly, it can lead to a company being
penalized by the authority.
This section will discuss the importance of audits in financial contexts, what an audit is,
types of audits, why they should be done and how to have a successful audit.
CHECKLIST OF ITEMS NEEDED TO PREPARE FOR AN AUDIT:
Auditors will check a company's books and records to make sure that the company is
following the rules and guidelines set by governing bodies.
A checklist is a list of items which helps in completing a task or staying on track. As the
name suggests, audit checklists help with auditing or checking records at work. It does
not help in completing the audit, but provides assistance to ensure that all aspects are
covered correctly.
In order to prepare for an audit, one should make sure that they have all documents
needed for an audit on hand. This includes financial statements, tax returns and
accounting information. Addenda or appendices with supporting documentation also
needs to be present in order for the auditors to get everything needed.
WHAT IS THE PURPOSE OF AN AUDIT?
An audit is an assessment of an organization's policies and procedures, usually with the
aim of identifying potential improvements. The purpose of an audit is to evaluate the
effectiveness, efficiency and compliance.
The auditor draws conclusions about whether particular objectives have been achieved or
not by examining the evidence provided. The auditor will also decide whether any
adjustments are needed in order for a company to achieve its objectives. Auditing is a
systematic process that assists in the evaluation, analysis and improvement of
management systems.
TYPICAL PROCESS OF AN AUDIT :
Audits are a set of reviews of a person’s or organization’s activities, practices, and
operations with the intent to identify potential problems. Audits may be conducted in
relation to standards (such as safety or quality), legislation, regulation and/or contractual
provisions.
A typical process of an audit can take many forms depending on the type of audit being
conducted. The main steps in an audit are: data collection, analysis, reporting and
recommendations
STEPS TO PREPARE FOR AN AUDIT :
A year-end audit is something that often sends shivers down the spine of any finance
professional. As the annual audit has a lot riding on it, it's understandable that many
approach it with caution and a little dread.
The year-end audit provides guidance on the business objectives for the next 12 months
and beyond to senior executives, decision-makers, and directors. As a result, finance
specialists are under greater pressure to present figures in an accessible manner and
make informed recommendations.
1. Plan ahead
2. Brush up on accounting standards
3. Reconcile all accounts
4. Learn from previous errors
5. Identify significant changes
6. Draw up a timeline
7. Divide responsibilities
8. Be proactive
9. Prepare your paperwork
CONCLUSION :
Depending on the audit, they may also ask for minutes from relevant meetings with
directors and other organizational documents, so it's important to check what's required.
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