Tip 1: How the audit is conducted

Work and Career

Tip 1: How the audit is conducted

Most economic entities are subject toannual audit. It is carried out in a certain order and includes several stages. Before starting the audit, you must select an audit company.

Instructions

There is a restriction during the inspection. The auditor must confirm the independence of the auditing company. He can not carry out an audit if he is on the board of directors or is a shareholder of the enterprise.

Initiation of an audit is very important. The management of the company must issue an order to conduct an audit. The contract with the company-auditor is obligatory. Only after this begins work.

The verification process can be divided into four stages. The first stage is planning. At the second stage, the internal control system is assessed and the materiality of the transactions is significant. The third stage is the carrying out of substantive analytical procedures and procedures.

The final process is finalized, analytical procedures are carried out. After that an audit report is issued.

Planning consists of two stages: strategic overall planning and planning of audit procedures. During the audit procedures, the specialist must find confirmation of existing figures, prove that there are no significant distortions.

Preparing strategic planning,the auditor analyzes the indicators of the client company and compares them with the existing ones on the market in the industry. For example, if the average profit in the industry is 10%, and the company indicates 70% of the profit, the auditor should carefully consider this point.

The complexity of the audit procedures and their listdepends on the client's business and on whether the auditor performs the audit of the company for the first or second time. Only after the implementation of the overall strategic planning the auditor starts the substantive planning.

Much attention is paid to the second phase, during which the company's internal control system is evaluated. The system evaluation is carried out for the preparation of correct audit procedures.

If the enterprise has a strong control system,management responds in a timely manner to changes in legislation, carries out strict financial control and control over the production process - in this case, the audit procedures may be less voluminous.

Sometimes there is no internal control system at the enterprise or it is very weak. Then the audit procedures in essence have to be made more voluminous.

The third stage of the audit consists in conducting analytical procedures, as well as substantive procedures.

At the last stage, allaudit documents and evidence on the project and issued an audit report. It can be of two kinds - unconditional positive and modified. The first is issued when there are no significant comments.

Modified can be issued with a reservation, be negative. A rejection of opinion is also possible. It all depends on the results obtained during the audit.

Tip 2: How to choose an auditor

A little more time has passed since that moment,as most companies and companies tried to cope with the process of analyzing their activities on their own. Today, company managers use the services of professional and qualified auditors. How not to make a mistake in choosing an audit or outsourcing company, if you really need their services?

Instructions

Outline the range of those outsourcingcompanies or private auditors that you could turn to. Consider each possible option, taking into account the feedback of previous customers, the list of services offered and the prices for them, the guarantees provided by the company.

Call the company or pay a personal visitin order to meet with a specialist at a meeting, discuss all the questions and points of interest. If you do not have a very good impression of the conversation, you are not completely sure of the correctness of your choice, do not rush.

Consult your companions, friendsor partners who have previously used outsourcing / audit companies and are happy with the cooperation: they can advise you and suggest a specific option.

Learn how wide the range ofoutsourcing / audit company services. As today's practice shows, inspections are an important part, but not the only one in the activity of auditors. In a greater degree, it will concern you if you are the owner of a large company or enterprise. In addition to auditing, these companies can conduct all kinds of consultations, provide legal services, conduct property valuation. Please note that by using the services of such a company, you can save a lot of money, distribute confidential information to a narrow circle of people, and also protect yourself from the services of an incompetent consultant.

Find out the prices for the services provided. Please note that a company that provides a wide range of services, in the state of which there are highly qualified specialists, will ask for their services the appropriate fee. Remember the phrase known to many to the pain: "Miserly pays twice."

Tip 3: What does the explanatory note look like?

Explanations for the annual report in the text andtabular form, commercial organizations submit to the tax authorities in order to give the most accurate and complete picture of the financial results and the change in the economic position of the firm for the year.

Who should pass an explanatory note

There is no need to submit textual explanationsbudgetary and public organizations, if in the past year they did not receive income from commercial activities, small businesses and firms operating on the USOS. To all other commercial enterprises, including those who have branches or separate subdivisions, and those who are obliged to pass an audit, it is necessary to provide an explanatory note. Otherwise, they will not be able to get a normal audit opinion.

What does the explanatory note look like and what does it reflect?

1.Information about the enterprise: full company name and short name, TIN and CIO, registration address, current account, name and address of the bank, organizational structure; SDCs (if any), the principles and provisions of accounting policies; number of employees; composition of founders; information on the authorized capital; The name of the audit company that issued the annual report. Statistical codes are sometimes reported.2. Types of activity and the amount of income received from each type of activity. Movement of NMA and fixed assets, the amount of accumulated depreciation. It is reported whether there has been a reassessment of the OS, and whether some groups of fixed assets have been conserved. Financial investments. If the organization invested in the authorized capital of third-party enterprises or issued bills, the explanatory note reflects the movement of accounts of financial investments. Analysis of MPZ (these include raw materials, semi-finished products, construction materials, semi-finished products and components, fuel), goods for resale and GP, construction in progress and work in progress, depending on the activities of the organization. 6. The balance of funds for settlement and other types of accounts and in the cashier's office. If an organization has frozen accounts with a non-zero balance or a card file, they are mentioned separately. 7. Structure of long-term and short-term DZ and short-term. At the same time, overdue debt is allocated and a list of the most indebted debtors and creditor enterprises is drawn up. This is necessary in order to determine the need to create reserves. 8. Short-term and long-term loans and credits. The analysis of attracted funds is made and the average interest rate on loans is calculated. Reserves and authorized capital. If changes were made in the amount of the authorized capital in the financial year, an explanation is made. 10. Explanation of the existence of assets recorded on off-balance accounts if the amounts of values are significant and affect financial activities. 11. Information on dependent or affiliated persons and financial transactions. Separately referred to transactions with shareholders and related persons. 12. SPOD. If an event occurred between the end of the year and the moment of signing the financial statements that could lead to a change in the financial position of the organization, it is reflected in the accounting for the current year, so that there is no distortion of the financial statements. The director of the organization and the chief accountant sign the explanatory note.

Tip 4: How to fill out the annual report

The work of an accountant requires assiduity andcare. A year of fruitful and zealous work is over, it would seem, now rest. But no. This is where the most difficult work begins - the preparation of the annual report. This is a kind of exam for the accountant. The report will be correct if certain indicators converge. The annual financial statements include: balance sheet, profit and loss statement, statement of changes in equity (form No. 3), cash flow statement (form No. 4) and supplement to the balance sheet (form No. 5). To match the reporting indicators, follow our step-by-step instruction.

Instructions

Do not forget that when you fill out the form number 3, in itIt is necessary to enter indicators not only for the reporting period, but also for the previous two. If the company has not undergone any changes, the indicators specified in line 100 will coincide with the figures for the previous year. If there are discrepancies, you need to find out their reason and indicate it in the explanatory note.

Pay special attention to the section "Helpreport ", they reflect the data on the size of the company's net assets. It is important that these indicators are not lower than the value of the authorized capital. If this is the case, the firm will have to reduce these indicators to the net assets.

Pay attention to filling out the form number 4. It should indicate the balance of funds for the firm as a whole, with the movement of money should be indicated for each type of activity.

Decipher some balance indicators atfilling out the form number 5. The money amount should be indicated only for the past year. Check if the individual items of the balance match the indicators of Form # 1.

The inconsistency found is explained inexplanatory note. It will be needed during the audit. The note should consist of three obligatory sections: - the structure of the company, and its main activities, - the accounting policy, - the factors that influenced the financial and economic work of the company.