Posts Tagged ‘The audit’
Types of Audit in Business
The expansion of the audits has led to a diversification of concepts or types of audit:
* External or independent Audit:
Also known as auditing of financial statements. It is performed by competent and independent through the implementation of procedures subject to generally accepted standards, in order to express an opinion on the fairness with which these financial statements present the financial situation.
* Internal audit:
An activity is complete, continuous and independent. It is made in an organization, personnel of the same, consisting in verifying the existence, performance, effectiveness and optimization of internal controls of the organization.
* Operational Audit:
A review of the operating procedures of any part of an organization (department, division, section) in order to evaluate the effectiveness and efficiency of it. Can be performed by internal or external auditor.
* Administrative Audit:
It is done when it comes to evaluating a specific role within the organization, in order to determine if you get maximum efficiency in this role in particular.
* Management Audit:
The objective is to evaluate the management, analysis and diagnosis of the performance of leaders and business leaders regarding objectives, policies and control systems. So they can determine existing weaknesses in terms of criteria of economy, efficiency and effectiveness.
Sine qua non is to be the total independence of the auditor, and that is that otherwise all would be completely nullified his opinion, lacking in credibility and validity to those who had placed their trust in him.
Benefit of the Audit in Business
Would be those connected with the company for any reason, and they need to be informed in a clear on it. The recipients are:
* Managers and administrators:
The audit provides them with a means to have a reasonable margin that both the management and control of the business were conducted efficiently and in accordance with the policies and procedures designed from top management.
* Owners:
The majority of the shareholders and owners delegate the power to administer third party. The audit must show the yield and the way in which heritage is managed. The auditor’s report serves as an element of the first trial to assess the ability of management.
* Investors:
To invest in the company must have information enabling them to ascertain the income, financial situation, therefore financial analysis by passing the entity.
* Banks and other credit institutions:
When loan applications are of great importance should be aware of reliable data on the creditworthiness of the applicant’s ability as well as the chances of returning the requested credit.
* The Public Finance:
The auditor’s involves the expression of good faith of the taxpayer, in that the audited financial statements that are reasonably reflect compliance with tax obligations.
* Financial analysts:
They are provided with the possibility of having uniform and reliable data for their studies.
* The creditors, suppliers and third parties in general:
For the guidance we provided them and gives them confidence as they try to enter into transactions, such as the sale of goods, services …
* Loa workers:
The company’s situation affects them face negotiations, profit share …
* Public authorities:
Any program of economic and social policy must be based on real data and true, so obtaining reliable macroeconomic variables.