Different audit services
In its broadest sense, an audit is an examination of some facts, to determine if they were carried out according to previously defined rules. Now, in the business field, the definition of auditing is more precise and generally refers to financial auditing, which consists of an evaluation in accordance with certain techniques and regulations, carried out by a professional accounting expert, on financial statements, books and accounting records of an entity, to give an opinion on the reasonableness of the information contained therein, as well as on compliance with accounting standards.
Although the definition may be more or less extensive, it is necessary to note the different parts that make up the process. On the one hand, there is who performs the examination; that is, the auditor. To obtain a good result in their work, the auditor is expected to meet a series of characteristics, such as their knowledge, experience, objectivity, independence, among others.
Another part of the audit process is the subject of examination. It can be a process, a result, a set of financial statements. It is the basis for defining the type of work. Financial, operational, environmental audit, etc.
The rules or procedures used when conducting the audit are another part of the job. Depending on the quality of the auditor or their position vis-à-vis the audited entity, they may vary, although they share certain principles. The standards for internal auditing differ from the standards for external auditors or other types of work.
There are also the rules or standards that must be followed when preparing the audited information or the evaluated process. In an audit of financial information, for example, the financial statements are expected to have been prepared in accordance with the accounting practice of the industry to which the organization belongs and the accounting standards that apply in the jurisdiction in which it is located. There are other characteristics about the Auditors in Dubai, such as scope, frequency, recipients, etc., that allow the audit to be classified based on them.
A broad classification of audit services is presented below:
Currently, with the incorporation of risk management to the audit, there is talk of a higher level in this work, which has been called assurance. Through this type of work, the auditor applies a series of procedures that allow him to conclude and assure users that there is reliability in the information and processes used by the client, which allows timely and correct decision-making.
A client seeks assurance services for different reasons:
All business owners and managers want to know how well their business is doing. Part of running an efficient and effective business is having early warning systems to detect potential problems. The auditor takes a fresh and independent look at the way a company does business and can give management a firm foundation on which to base necessary changes.
The auditor analyzes the risks facing the client, prioritizes them, and assesses whether the client’s efforts to control or mitigate them are successful or need work. The risks can be internal or external.
Business performance measurement
This assurance service addresses whether the company has relevant and reliable ways of evaluating how well it is achieving its objectives and goals. Many companies would like to know how well they are performing compared to their competition.
Support in new technologies:
Companies are increasingly using electronic data exchange systems for all facets of sales and purchases, including consumer e-commerce transactions through online vendors. An assurance service can help address the risks of electronic transmissions, electronic documents, and their supporting systems and promote their integrity and security.
The attestation is an express statement made by a public accountant, in which it exposes the responsibility that it assumes regarding the content of any document, prepared and certified by the administration of an organization; that is to say, that he undertakes as a witness to the events or operations that are set forth in said document. Attestation types are examinations, reviews, and performance of agreed upon procedures. When the examination is about financial statements, the engagement is called an audit.
The number of topics that can be covered in an attestation job is practically unlimited. For example, the topic may be the financial forecast of a company, which is an estimate of the future success of the company. Or you can carry out a break-even analysis, which involves figuring out how much revenue the client has to bring in to cover expenses. It can also be about a management claim: if a private company maintains an effective system of internal controls over its financial reporting, for example.
Examination of a matter
In an examination, the auditor issues an opinion as to whether the subject matter conforms in all material respects to whatever criteria he or she is using. For example, the criteria may be generally accepted accounting principles (GAAP).
Review of financial statements
When performing review work, the auditor examines a client’s documents and provides negative assurance about a client’s assertion. For example, the auditor says that nothing came to their attention that was not in compliance with GAAP.
Reviews are typically performed for private companies when users of financial statements require some type of assurance on financial statement assertions, but do not require a full audit.
In this case, the auditor only reports on specific procedures with measurable criteria that do not require an audit report. For example, a review of the rate of return on the client’s investments and its checking against client records on the same topic.
Reporting on internal control in the preparation of financial statements of a private corporation is another possible compromise of agreed upon procedures.
The audit includes such work as internal controls audit, compliance audits, operational audits, forensic audits, and financial statement audits. These engagements involve gathering and judging evidence to issue a report, but only financial statements and internal control audit reports include an auditor opinion. This is because the quality of the public accountant or being independent is not always required to perform certain compliance, operational or forensic audits.
The purpose of compliance audits is to see how well a company is following applicable rules, policies and regulations. For example, as an internal auditor, your job may be to see how well the various departments in your company are referenced by corporate statutes (rules that govern the operation of the company) or by relevant government regulations.
Operational audits measure the effectiveness and efficiency with which a company uses its resources. Operational audits also assess whether the company can meet its business objectives and goals using its current strategies and resources. To conduct this type of audit, you can examine company policies and procedures (the methods the company uses to achieve its objectives). You can also examine the relationship of the company with its board of directors, its legal department and its human resources, planning and finance departments.
It is an examination of the financial statements and accounting records of a company, through the study of the evidence that supports the figures, in accordance with professional procedures and techniques and that are the basis for the opinion or report of the auditor in which it is expressed if The aforementioned financial statements were prepared in accordance with the accounting principles applicable in a given period.
As can be seen, there are a large number of audit services that an auditor can provide, depending on the audited object, the applicable standards, the scope and the needs of the users of the auditor’s professional services.
Read also: Services Offered In an Accounting Firm