Everyone wants to know they are dealing with credible information, whether it be shareholders, creditors, lenders, employees, analysts, prospective investors, so that they can make assessments and decisions with confidence. An audit can also deliver value to an organisation by providing business advice on the internal controls, processes of the business, and recommendations for improvement.
When conducting an audit, the auditor assesses whether:
This provides audit assurances through
As evidenced, audits can result in a lot more than just issuing an audit report; for example, it can result in process efficiencies for your business that help improve turning costs into profit!
A review is smaller in scope than an audit, and consequently does not enable the auditor to provide an audit opinion. A review of a financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.
Instead, an auditor would provide an opinion that, based on their review, nothing has caused them to believe the financial report was not prepared, in all material aspects, in accordance with the relevant reporting framework.
The requirements differ depending on the type of legal entity.
When running a charity, your audit requirements depend entirely on the total amount of revenue that your charity generates.
Proprietary companies are audited on the basis of size as well as foreign ownership.
The financial statements of a listed company are subject to a half-year review and audit of the financial statements for the financial year.
Incorporated associations, in much the same way as charities, are audited depending on their annual turnover.
Audits can be annoying, however, are an integral part of compliance and business strategy.