Accounting Auditing becomes important to the entrepreneur as his company grows. In the beginning, when the operation is small, this control can be done easily, but with the growth of the company and its complexity, accounting auditing is essential.
This process is able to guarantee to all interested parties that the company is working in accordance with accounting standards and laws, and that the financial results presented by the company are true.
For this, having good auditors who perform an internal audit efficiently is one of the steps to keep the verification of accounting records up to date.
In this article, we will explain in more detail what Accounting Auditing is, what its exact role within an organization is, how it contributes to maintaining the company’s good financial health and consequently obtaining good results.
Good reading!
What is Accounting Auditing and what are its advantages?
An Accounting Audit is a sample assessment of a company’s financial records. This analysis is intended to ensure that the organization’s statements are a fair and accurate representation of the company’s real financial position, thus preventing possible fraud and irregularities in the financial management of the enterprise.
This verification is essential for companies in any area and, precisely for this reason, it should be part of the company’s routine. The audit is necessary for many factors, of which we highlight:
- Verification of the general reliability of the accounting system;
- Avoid fraud, deviations and irregularities;
- Increase in the reliability of the calculation of the income earned by the entity;
- Viewing a real picture of the gains or losses incurred during the period;
- Identification of financial problems.
Accounting auditing can be an internal process, in which case, accountants can be either outsourced specialists or professionals part of the company’s staff.
External audits, on the other hand, are carried out by certified public accountants, who work independently from a company or organization, examining the financial statements prepared by the management of the company or organization (the internal audit).
In all cases, the auditor is a key figure in this process, which functions as an independent examination of an entity’s financial statements, whether for profit or not, regardless of its size or legal form.
It is also worth mentioning that an Accounting Audit is not restricted to the company’s administrative and financial sectors.
It assists in the analysis of other sectors, such as technical, coordinating and even ethical aspects of the enterprise, since through the Accounting Audit it is possible to check if the company’s data and information are being updated correctly and without fraud.
How to get good results in Accounting Auditing?
Accounting auditing differs from other financial routines , since the nature of financial responsibility means having to work within strict deadlines and with a close eye for details.
To obtain good results in Accounting Audits, some tips and procedures can help a lot. Among them:
- Plan ahead
Do not wait to think about Accounting Auditing until the time comes to do it. Take the time to properly prepare for the audit, to be available during work and to communicate with the auditors involved in the process.
Proper planning and clear expectations will assist in preparing the audit throughout the year-long process, which is the period that is often analyzed.
By keeping schedules and reconciliations up to date over the months, you can reduce the time needed to prepare for the audit.
- Organize data
Create a file with all the results of the audits already carried out. This facilitates access for auditors in the coming years.
Also consider creating folders and significant categories of transactions like cash; revenue and receivables; expenses and accounts payable; investments; fixed assets; debt, etc. Work documents that contain confidential information, such as payroll, for example, can be password protected or kept in an appropriately restricted network location.
These information folders make it easier for the accountant to manage and work when auditing. The more disorganized the company information is, the longer the Accounting Audit will take.
- Use accounting management software
Gone is the time when an Accounting Audit was a long, time-consuming and extremely laborious process. Today, accountants can take advantage of accounting management software to make the process easier and faster.
The software also enables the integration of information, in addition to greater control, security and, above all, obtaining more accurate results in calculations and analyzes.
- Compare internal and external records
The comparison of the company’s internal and external records also helps to ensure good results for the Accounting Audit. This comparison can be made with the verification of suppliers’ receipts, registration information, analyzes, among others.
All data and information must match, that is, they must be equivalent, ensuring that there are no different errors or references between them.
- Risk assessment
Speaking of errors, any inaccuracies must be identified, considering the tax aspects, documentation and, especially, the fulfillment of duties and obligations, such as labor charges, for example.
It is important to remember that any error that appears in the Accounting Audit can be extremely harmful to the financial stability of the company. Therefore, the process must be done with responsibility and precision.
- Evaluation of results
Maintaining good communication with auditors during the time of the audit is also important. If items are still open at the end of the assignment, set dates for the information to be provided to the auditors.
Also, consider holding a post-audit closing meeting with the employees involved to communicate results and request feedback.
Conclusion
Accounting auditing is essential to keep a company’s finances up to date, in particular to perform a complete and detailed examination of a company’s financial records.
Performed by specialized accountants, the audit will find possible errors and fraud, in addition to pointing out data and information about the integrity of the company as a whole, not just about its financial and administrative obligations.
There is a long list of reasons why you should perform audits regularly, especially to check that the financial data presented by the company is correct, in addition to ensuring that the company complies with current accounting standards, keeping up with the legislation.
The use of financial management software, the prior organization of data and procedures, among other practices, help to achieve good results in Accounting Auditing.
Still, it is worth remembering that, in order to practice good accounting auditing in your company, it is important to have a good knowledge of corporate finance and the audit process as a whole.
