The objectives of the audit: purpose, stages of implementation

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Any company always maintains records using accounting, which is an orderly basis for organizing all the property and operations of the enterprise itself over a certain period of time.

Accounting includes information about what transactions were carried out, what property and money are on the company's balance sheet, as well as other important information about the state of the company and the conditions of its management. However, accounting data is not always accurate and reliable. There can be two main reasons for this: an accidental error or deliberate data falsification.

The way out in this situation is to conduct an audit as a means of dealing with errors in financial statements in the form of inspections.

What is the purpose of an audit? We will try to answer this very important question below.

Audit is an independent verification of an enterprise and its accounting documents relating to this company.

Concept and legal framework for audit

The audit isis an audit of the financial management of an enterprise or organization, conducted by an auditor on the basis of the submitted financial statements of the company.

The legal framework for auditing in Russia is represented by the following main documents:

1. Federal Law No. 307-FZ of December 30, 2008 "On Auditing" contains general concepts of auditing and all relevant actions.
2. The Federal Auditing Standards govern audit procedures.
3. The Auditor Code of Ethics contains the principles and rules of conduct for auditors.
4. GOST documents, requirements of tax authorities and other supervisory authorities.

The concept of audit, certification requirements, the rights and obligations of individuals, the responsibility of organizations is defined in the main document regulating such activities in the Russian Federation - this is the Federal Law of December 30, 2008 No. 307-FZ "On Auditing".

Role and importance of audit

Like any process, an audit has a primary audit purpose.

This procedure allows you to form a basis for conducting a study of the financial condition of the company in order to identify the strengths and weaknesses of the organization, as well as to solve the problem of making informed decisions, preventing administrative sanctions from state bodies. A mature manager fully understands the need for audits and usually does not put them off. However, not all so simple. The results of the audit and the future activities of the company willdirectly depend on the level of knowledge, professionalism and qualifications of audit workers. This is because industry standards give them a lot of room to make decisions.

Types of audit

Audits have different types depending on the criteria. According to the criterion of audit objects, the following types are distinguished:

• general;
• banking;
• government;
• stock exchange, off-budget funds, insurance companies.

In relation to the audited organization, a distinction is made between external and internal audit.

When answering the question: “What is the main purpose of an audit?”, you can imagine the following classification by groups of operations that he checks:

• economic activity in general;
• financial transactions in general or specific types;
• financial report;
• enterprise management, etc.

In addition, depending on the relationship of legislation to audit, there are:

• mandatory;
• proactive check.

The first type of audit requires a more responsible approach from auditors than voluntary. The activities of the auditor should be based on several principles:

• audit is carried out in full in the following areas: business activities of the company, balance sheet, inventories, settlements with the budget and founders, the company's obligations to creditors;
• The auditor's conclusion must be absolute: the information provided is either reliable orno;
• Auditor follows the rules of procedure established by federal law.

The benefits of mandatory verification are:

• errors in accounting are corrected immediately - this minimizes the tax and financial risks of the company;
• when violations are detected in the actions of officials, the audit reduces the risk of fraudulent behavior of personnel;
• tax accounting stabilized to avoid fines;
• all workflow is in line with legal requirements.

Proactive audit is the most "young" form: it became widespread when the Russian economy began to rapidly adapt Western technologies to the conditions of the domestic market.

Initiative audit at the personal request of the owners or managers helps to find out the information contained in the reports on the financial condition and economic activity of the enterprise. Such knowledge helps to make the right management decisions and develop a competent company development strategy.

Initiative audit of the organization, as the name suggests, is not mandatory, but it is subject to rules and algorithms.

Main goals and objectives of the audit

Audit is a procedure for an independent assessment of the state of the organization's finances. The main purpose of the audit is to identify errors in the financial statements and provide the manager with objective and accurate information about the status of the documentation.his company. Thus, the procedure is aimed at collecting, studying and analyzing all business transactions carried out by the audited entity during the reporting period, with a view to their correctness and accuracy, reflected in the documents.

The main purpose of an audit is to verify the accuracy of statements, and the main condition for its implementation is the independence of the auditor. The result of the audit is officially recorded in the prescribed form, which is the competent opinion of the auditor on the degree of accuracy of the financial information contained in the reports for a certain period, that is, the audit report.

The task of an audit is to check statements, confirm or refute the reliability and correctness of the information contained in the reporting.

In essence, an audit is a control of the accuracy of information in existing reports. The main condition for success in carrying out such work is the involvement of an independent specialist who can conduct impartial checks.

The completion of the work of auditors is a conclusion in the form of a conclusion, which fixes the opinion of the inspection body regarding the correctness of the information in the company's reports.

The audit report is prepared in a special form and contains complete information about the results of the audit. Based on the available data, it is easy to determine the competence of the company's accountants and identify attempts to deceive the controlling structures. In practice, an audit conducted by independent bodies monitors compliance with laws and regulations, as well as the absence of violations of them.

The main tasks of an audit in a company are:

• verification and confirmation of the correctness of the information reflected in the financial statements of the organization;
• detection of violations with subsequent reference to them (if necessary, they can be eliminated);
• obtaining accurate information about the company, as well as the state of accounting in it and in the documentation.

Audit Objects

The list of enterprises that must conduct an audit annually is contained in the Federal Law "On Auditing". These businesses include:

• firms that issue securities traded on the stock exchange, as well as companies operating professionally on the stock market;
• enterprises engaged in clearing or insurance activities;
• mutual funds, pension funds, as well as non-state off-budget funds;
• financial institutions, namely banks, MFIs and others;
• currency, commodity and stock exchanges;
• joint stock companies;
• firms publishing their reports in the public domain;
• other companies whose annual income exceeds 400 million rubles, as well as companies with assets in excess of 60 million rubles by the end of the reporting period.

In addition, a statutory audit is carried out in accordance with the goals and objectives of the audit if the firm:

• applies for a loan (verification may be one of the requirements of the bank);
• makes a big deal or requires investment;
• participates in the tender.

Audit planning basics

There are several steps in organizing audit planning:

• client's formal proposal for an audit;
• initial acquaintance with the characteristics of the company, its financial performance without detailed verification;
• developing, executing and drawing up a coherent plan and the formation of a specific audit program;
• drafting a letter of inspection;
• certification of the audit contract by two parties.

In general terms, the purpose of audit planning is to identify:

• subject of study and list of objects under study;
• list of questions for each item to be checked;
• sources of information;
• working conditions;
• structure of the group of reviewers;
• duration and execution of the program.

Audit program is a detailed document that develops a general plan and contains a list of audit procedures.

Stages of implementation

Any audit goes through three stages in accordance with the objectives of the audit:

1. Preparatory. At this stage, the auditor meets with the client, concludes an agreement with him to conduct an audit, draws up a plan, determines the scope of work;
2. Gathering audit evidence. At this stage, the actual activity of a specialist is to collect, study and analyze all the necessary documents;
3. Drafting an audit report. itsystematization and synthesis of the received information. After the audit, an auditor's report is drawn up, which includes his opinion on the accuracy and fidelity of accounting in the organization.

Check results

As a result of the audit, an audit report is drawn up, which can be unconditionally positive or modified. With an unconditionally positive opinion, the specialist has no comments and reservations, and the purpose of the audit is achieved.

A modified conclusion is issued when the auditor wants to draw the attention of the auditee to any situations or factors that may affect the opinion of the auditors.

The purpose of an audit is to identify errors in reporting. As a result of their identification, the auditor may express a qualified opinion, an adverse opinion, or reject his expression altogether.

Disclaimer

The audit report must be included in the annual financial statements. Otherwise, the tax authorities cannot accept it, citing the fact that without an audit report, the statements are not reliable.

For failure to submit the required documents on time, the tax authorities may impose a fine of 200 rubles for each paper not presented on the basis of Art. 126 of the Tax Code of the Russian Federation.

In addition, the court may impose a fine in the amount of 300 to 500 rubles per official for failure to submit reports to the tax authorities within the required period.

Conclusion

Results obtainedallow you to draw final conclusions (conclusion) about how well the accounting is kept, whether the financial statements of the company are reliable and reliable. Thus, by providing the auditor's opinion, the main objective of the audit can be achieved.