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AUDITING

AUDITING

OVERVIEW

If you own a business, the annual audit can sometimes feel like a time-consuming and expensive process that only benefits the statutory authorities. We make sure all your onerous reporting requirements are met as painlessly as possible- keeping banks, creditors, finance providers, and even the Inland Revenue, happy.
However, more than that – we aim to offer you the kind of business advice that could help you to run your company efficiently and cost-effectively. We also offer expert corporate tax planning advice, to make sure you are as tax-efficient as possible.
We will review your accounts department and the control measures you currently use, recommending ways to improve. We might discover that your competitors are receiving payment more quickly than you, your stock levels might be higher than the industry norm, or perhaps your company takes longer than average to complete orders and sell finished work. Alternatively, there may be ways to improve your cash flow using some careful tax planning.

We provide following Audit Services

  • Internal Audit Services / Concurrent Audit Services
  • Management Audit Services
  • Operations and Efficiency Audit Services
  • Special Investigative Audit Services
  • Due Diligence Review
  • Costing and Accounting System Design and Review
  • Compilation of final accounts as per accounting standards of US GAAP

INTERNAL AUDIT

What is an Internal Audit?

Internal Audit is an independent appraisal function established within an organization to examine and evaluate its activities as a service to the organization. It is an independent, objectives assurance and consulting activity designed to add value and improve an organization’s operations. It helps organization to accomplish objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and government process.

Scope and Objectives of Internal Audit

The Scope and Objectives of internal audit vary widely and are dependent upon the size and structure of the entity and the management’s requirements. The internal audit normally operates in one or more of the following areas:

Review of accounting system and related internal controls: Although the establishment of an adequate accounting system and related internal controls is the responsibility of the management. However, it is must that they are reviewed from time to time to ensure that they are operating effectively and recommend any improvement thereto

Examination of Management of financial and operating information : It includes the review of the means used to identify, measure, classify and report such information and specific inquiry into individual items including tests of transaction

Examination of the economy, efficiency and effectiveness of operations including the financial controls of an organization: This will help the external auditor when it has an important bearing on the reliability of the financial records

Physical examination and verification: It includes the examination and verification of physical existence and condition of the tangible assets of the entity.

The objects of internal audit can be stated as follows:

  • Verification of the accuracy and authenticity of the financial, accounting and statistical records.
  • Ascertaining that accepted accounting policies and practices have been followed while preparing the financial accounts.
  • The assets are purchased or disposed under proper authorization. Also ensuring that the access to assets is restricted to the authorized persons at the authorized times.
  • Confirming that the liabilities are incurred for the legitimate activities of the organization.
  • The internal checks system operating in the organization is sound and economical.
  • Fraud and errors are prevented and detected.
  • Reviewing overall operations of internal control system and if deviations or weaknesses are noted, the same are communicated to the appropriate authorities on timely basis. This will help in instituting corrective actions.

Making Internal Audit Effective:

Once the external audit has decided to place reliance on the work of internal auditor, he should coordinate with him, i.e., he should ascertain the internal auditor’s tentative plan for the year ,discuss with him the areas of possible reliance, the extent of internal audit coverage, test methods, methods of sample selection of documentation and review.

Further, the external auditor should be granted access to the internal audit reports and be kept informed of any significant matter, which comes to internal auditor’s attention. Similarly, the external auditor should ordinarily inform the internal auditor of any significant matters, which may affect his work.
The External auditor should take into account the following factors in relying on the work of internal auditor:

  • The adequacy of audit programmes in relation to the scope of audit report.
  • The planning of the work, supervision and review of the documentation of the assistants;
  • The availability of sufficient appropriate audit evidence.
  • The appropriateness of conclusion reached and the report thereon.
  • Any expectations or unusual matters disclosed by the internal audit.

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