Auditing services strengthen the reliability of financial information and have become essential in business relationships. Learn where to start and which type of audit is best for your company!
Conducting an audit requires great attention to detail, as every finding is crucial. The process ensures that a company’s internal operations are carried out with complete transparency, demonstrates a commitment to quality, and instills confidence in all stakeholders. In doing so, it also helps to enhance the company’s credibility within its industry.
While it might not be widely known, there are different types of audits, each with its own focus. With one of our articles, you may have already realized that your business needs an audit. Now, let’s look at the ideal type for your company.
Steps Leading to the Audit
Given its importance, there are several preparatory stages that must be completed before beginning an audit.
For example, a **financial audit** is done to ensure that the financial information provided reflects the business accurately, without significant distortion. This audit is often required by banks, suppliers, or company directors. It involves numerous specific procedures that must be carried out by a certified auditor.
Another process, called a **limited review**, is a step above basic accounting. In a review, auditors assess whether the accounting balances reflect the company’s reality, but with fewer procedures than a full audit.
Where to Start?
Never done an audit before or unsure what to do next? Here’s where you should begin:
- Fiscal Accountant: If you’ve never done any audit before.
- Limited Review: If you’ve already done some auditing and are ready to take the next step.
- Audit: If you’ve completed a review and now need a full audit.
TYPES OF AUDITS:
Fiscal Audit:
Within the realm of fiscal audits, which focus on taxation and taxes, several subcategories exist. These audits ensure that taxes are correctly applied, check whether tax calculations align with the product or service, and verify whether the company’s tax reporting aligns with what’s recorded in its system.
Financial Audit:
A financial audit checks the revenue of the company to ensure that payments have been received or are still outstanding. It verifies whether purchases have been properly approved and if the invoices entering the system match the automations and payment amounts.
Inventory Audit:
This type of audit looks at whether the company’s inventory accurately reflects what’s in stock. It verifies whether stock input and output processes are secure, reducing the risk of fraud or error.
Accounting Audit:
As mentioned, accounting audits are crucial at the close of the fiscal quarter. This is the ideal time to prepare for the audit by analyzing the year’s data, setting up necessary controls to adjust, and conducting further analysis early the following year.
Benefits of an Audit:
Now that you’re familiar with the four major types of audits, let’s look at the benefits of implementing one:
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Security:
Stakeholders such as banks, investors, suppliers, and partners gain confidence that the financial statements are verified, accurate, and trustworthy, as they’ve undergone external validation.
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Increased Credit Limits:
Companies with audited accounting information are often able to access better credit terms, as audited accounts lower the perceived risk from banks and suppliers.
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Reduced Risk:
For example, a fiscal audit ensures that tax filings and product taxation are correct, minimizing the risk of discrepancies with government tax agencies (state, municipal, federal).
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Opportunity Generation:
Through the audit process, companies can identify areas of tax optimization or potential credit claims, which can help reduce taxes or improve financial outcomes.
Conduct Your Audit with Us
No matter which type of audit your business requires, count on Value.
We serve clients across the country and in various sectors of the economy. Our experienced and specialized team provides exceptional service tailored to each market’s needs.
Schedule a consultation with us today!
> Read also: Do You Know if Your Business Needs an Audit? Check out the testimonial from Marcelo Alvo, superintendent of Recco, discussing the actions of Value within his company.
