Business owners, managers, directors, the state and all economically active individuals in a business, constantly seek to obtain financial, operating and administrative information that is useful for decision-making, in order to establish instruments control to help you improve your operational and surveillance procedures.
In the legislation of most countries, a large type of tools has been conjured for the evaluation and control of activities, it tends to carry out a periodic examination by a person or entity outside the company and with a criterion that is not biased to no interest, that provides full information security, this has given rise to the audit.
Next, an analysis will be presented of the importance of the audit, the rules that govern it, its foundation, some of the different classes, those that are practiced for companies, and what it seeks to obtain within the implementation of the organization. bearing in mind that not all of them are mandatory.
Audit environment:
In all countries in which public and private companies and entities have to keep accounts of their daily operations, they may be subject to a rigorous examination of each of them. The evaluation of these is subject to the regulations, legislation and prescriptions of each one of the nations, but as a general rule this examination is carried out under defined parameters, among which are the "Auditing Standards" that have been prepared under the fundamental truths, evident and accepted by the accounting profession and the principles that govern it.
A continuous examination
The review of accounts is the specialized study of the documents that legally, technically, financially and accountingly support the operations carried out by the managers of the company during a given period.
Auditing standards:
Definition:
Auditing standards are those basic rules that contain all the general principles that guide and guarantee the auditor's work, establish the conceptual framework in which the auditor decides the actions to be followed in the execution of his examination, which is aimed at Obtain evidence and in preparing the report. These standards measure the quality of the audit engagement.
The objectives, the actions carried out and their obligation lie in the fact that the audit is a professional activity with a high content of social responsibility, especially with the granting of public faith as an element of the state that generates economic development, for which reason Accountants are required to participate actively, dynamically and openly, with a propensity to strengthen ethical and moral values that correspond to public trust.
Auditing standards can be classified into three fundamental types:
1. Those referring to the person who performs the audit work, since it must be carried out by suitable people, with adequate preparation, regardless of thinking about their work, impartial, objectively and above all with professional diligence.
2. Those referring to the execution of the work, which must be done technically planned, with constant supervision evaluating the internal control systems, taking sufficient and valid evidence through the analysis of financial information.
3. And for those relating to the rendering of reports expressing the nature of the examination carried out, its scope, the information contained within it, whether the accounting principles have been respected and applied uniformly, ending the opinion from the study presenting the qualifications of the case if necessary.
Audit programs:
These are made up of the sum of all the audit procedures applied within the process of obtaining evidence, generally they are designed within the first stage of audit planning, it is based on three essential factors:
- Risk assessment: The risk inherent in work and that of committing human error. Materiality: audit programs must be prepared for each area of the financial statements. Control: The necessary tools must be applied to avoid any type of deviation or failure.
Audit procedures:
They are all those specific operations to carry out in the audit, they are made up of a set of investigation techniques applicable to an item, an account, a group of accounts, a fact, a group of facts, related to the financial statements..
Auditing standards are closely related to the qualities of the person performing the audit work, the performance of the examination, and the report on it.
Auditor's Obligations:
- Carry out their work in accordance with the auditing standards Clearly express their opinion or opinion Indicate the qualifications if any Indicate the effects of these qualifications
Auditing classes:
To comply with the legal and current provisions decreed by the state and the pronouncements made by the legal and governing bodies of the public accounting office, the accountants and tax auditors must fulfill the functions assigned to them when carrying out the audit work. In most countries, companies carry out comprehensive audits with objectives specified by each superior council of the accounting profession, among the most common are:
Financial Audit:
This determines whether the financial statements prepared by the company are governed and comply with the accounting standards generally accepted by each country.
The objective of the financial audit is to examine the financial statements by a public accountant different from the one who prepared the accounting information, in order to establish its reasonableness, making the results of its analysis known, in order to increase the usefulness of the information possesses. The report or opinion presented by the independent public accountant gives public faith to the reliability of the financial statements and, therefore, to the credibility of the management that prepared them.
An audit of financial statements is not limited only to a verification of documents in the accounting, but has a broader scope in that it checks whether the documents that come to the accounting to be recorded and synthesized in the statements accurately represent the operations carried out in all the areas of the entity such as purchases, production, sales, treasury etc.
As the financial statements are a faithful image of the financial and patrimonial position of the entity of the result of its operations in a determined period and of the origins and applications of its resources.
Management Audit:
This audit evaluates the degree of efficiency and effectiveness in achieving the objectives set by the organization and with which the resources have been managed.
The main objectives of the performance audit are:
- Evaluate the objectives and organizational plans. Monitor the existence of adequate policies and their compliance. Check the reliability of the information and controls. Verify the existence of adequate methods of operation. Check the correct use of resources.
In this type of audit, the development of a work program depends on the circumstances of each company audited.
Compliance audit:
The compliance audit determines whether the organization has fully complied with the legal norms and provisions in the development of its economic activity.
It essentially consists of checking the financial, administrative, economic and social operations of the company, to establish that they are complying with the statutory norms provided by the government for the proper functioning of its operations.
Its objective is to check if the procedures and control measures are adequate and if they are being applied effectively.
Internal control audit:
Its main objective is to evaluate the internal control system, its applicability and its operation. In this audit, compliance with the internal control components must be taken into account, of which the following can be mentioned:
- Control environment Risk assessment Control activities Information and communication Supervision and monitoring
When evaluating internal control systems, it must be taken into account that a system may be effective for some companies but it may be obsolete and not applicable for others, therefore, factors that define it must be taken into account, such as the type of production and products that It markets, the nature of the entity, the size, its organizational culture and all those that are plaited in its conformation and operation.
Lastly, it must be made clear that carrying out an audit outside the parameters established by law and by the government entities of each country, lead to sanctions for the owners of the companies, for the accountant or tax auditor that I carry out. the audit, these can be provisional or permanent according to the omissions or errors that appear in the performance of the work.
