The market economy is an incredibly complex system. Finding your place in it is not so easy, especially when it comes to business. Both legal entities and individual entrepreneurs must carefully take care of their financial condition. Audit plays an important role in this care. Not everyone is familiar with the planning and implementation of an audit. What is this procedure, how is it implemented? Let's try to understand our material.
What is an audit?
In Latin there is the word audio, which means "listener", "hearing". A person who can listen is capable of helping. For example, this is a doctor who has learned about the state of he alth of a patient. Having understood the causes of the disease, he is ready to begin treatment. In the economic sphere, the auditor is the same doctor. Only its main goal is not treatment, but the search for problems, one might say, diseases.
Financial verification is a mandatory procedure for all legal entities. Once a year, organizations should pay attention to planning and conducting an audit. You can do this more often, but it all depends on the will of the legal entity itself.
The auditor checks the financial and economic condition of the organization. He has much more knowledge and skills than, for example, an accountant. This is due to the continuous development of the audit procedure over the past 30 years. Since the time of perestroika, the active formation of the market began in the country. But a strong economy cannot be formed without high-quality control and supervisory measures. Control is exercised mainly by the state. At the same time, his goal is not to impose his services, but to create a system in which legal entities would become more independent in matters of financial audit and audit planning.
Goals and objectives of audits
The purpose of the audit is to establish the accuracy and reliability of the financial statements of various economic entities. This is also fixed in the Federal Law "On Auditing in the Russian Federation". In the course of the audit, it is necessary to obtain sufficient and accurate evidence to allow auditors to speak with confidence about the compliance of the existing reporting with the norms of Russian legislation.
The following objectives should be achieved during the financial due diligence:
- full identification of financial reserves and verification of their compliance with the data specified in the documentation;
- checking the completeness, accuracy and reliability of the reporting of all costs, reserves, finances and borrowed funds;
- confirmation of the reliability of reports or a conclusion about their unreliability;
- control over compliance with Russian legislation.
Goals may seem a little hard to grasp, so the lawyers were able to reformulate them. So, planning and conducting audits is necessary to check the economic condition of the organization:
- on the validity of including certain amounts in the reports;
- on the overall acceptability of reporting;
- for completeness and accuracy of calculations;
- on the fidelity of the assessment given to the organization by its actions;
- to split the balance;
- on the openness and accuracy of the information included in the financial statements.
Thus, the task of audit companies is to conduct a thorough audit of an organization. If problems are identified, the auditors are required to point them out and ask the company to correct the situation immediately.
Integrity, impartiality and confidentiality
The principles of planning an audit and its implementation are about the same. All of them are listed in the first chapter of the relevant Federal Law.
The first principle is integrity checking. It is the completeness and accuracy of the implemented actions that is the basis of professionalism. Both auditors and their subordinates are required to competently and efficiently organize their activities. It is forbidden to hide important information from each other, interfere with work, demonstrate your incompetence, etc. You must always maintain professionalism and a desire to do your job as best as possible.
The next audit planning principle and itsimplementation is called impartiality. This is a very important principle, as it is associated with the concept of objectivity of verification. In short, all work must be done honestly and truthfully. No obstacles should interfere with the accurate determination of the results. The principle of impartiality is supported by some guarantees fixed in the Federal Law. In particular, this is a ban on conducting multiple audits by the same auditor, the inadmissibility of a financial audit by a person who is a relative of the audited entity, etc.
The third principle is confidentiality. All information received from the auditor to the audited entities must be protected. This is especially true of the audit planning procedure. The security and secrecy of the information provided will allow for a more accurate and impartial verification.
Professionalism, independence and reliability
The principle of professionalism is based on a number of important guarantees. In particular, these are special requirements for the education, skills and abilities of auditors. Getting a job at a financial due diligence company is not easy. This is much more difficult than getting a manager or an accountant. One has only to think about how many responsibilities are assigned to auditors. Understanding the economic activities of dissimilar enterprises, moreover, within a limited time frame, seems to be an incredibly difficult task, and sometimes even impossible. In order for everything to go well and without a single mistake, you need to remember the principle of professionalism. This is knowledge of one's business, interest inhim, respect for professional etiquette and the ability to reasonably evaluate their actions.
The next principle is independence. This is an idea closely related to the notion of impartiality. Some lawyers refer to independence as a guarantee, rather than fundamental principles and ideas. The thing is that, like judges, auditors independently organize their activities. They obey only the law. No one can put pressure on the auditors or interfere with their activities in any way. Any attempt to bribe persons exercising financial supervision will be punished in accordance with the criminal law.
The last important principle of conducting, organizing and planning an audit is the focus on the process of obtaining evidence. This is a reasonable and legal way to draw reliable conclusions before or after an audit. All evidence must be verifiable. Since the audit is carried out in a limited period of time, it is simply impossible to check the entire economy of the enterprise. Therefore, audit companies simplify their activities a little. They interview auditees and then check some of the evidence for authenticity.
Thus, the purpose of audit planning and implementation is underpinned by six important principles. There are two main forms of financial due diligence to consider next.
Internal audit
Financial and economic supervision has two main forms: external and internal. Both of these forms differ in scope and purpose. Thus, the planning of internal audit is determined by the Federallaw purpose. This is assistance to the governing bodies in the implementation of effective supervision of various links and elements of control. The main task of internal auditors is to meet the needs of governments in terms of providing control information. An assessment is given of the adequacy of control systems and the effectiveness of their activities.
Internal audit comes in several forms. It can be functional, that is, aimed at evaluating the productivity and efficiency of the economy. There is also an organizational and technical form of audit. It is expressed in the supervision of various levels of management, as well as control for their technological or organizational feasibility.
Most often, internal audit is used in the banking system. Since credit institutions have a very complex and extensive structure, it is easier to check them in parts. The practical benefit of an internal financial audit is often much greater than that of an external one. A major disadvantage is the need for constant repetition of the audit. So, the procedure should be carried out not once a year, but much more often. Another problem is planning the audit process. Not all organizations have the time to constantly develop audit plans.
External audit
The external form of the economic and financial audit is more complex and extensive. The main purpose of such a check is to provide real, objective and accurate information about the entity being audited.
External audit under contractbasis. The task of those who check the financial condition of the enterprise is to evaluate the entire organization, and not some of its parts. An external audit is mandatory. Organizations are required to implement it once a year. The functions that auditors perform are sometimes not interrelated, and therefore the result of the audit may not always be accurate. Everything will depend on the professionalism of both parties and on the desire of the auditor to conduct quality supervision.
The depth of the external check varies. It is determined by the contract, which is drawn up at the planning stage of the audit. The essential, that is, the mandatory terms of the contract, are the verification of accounting documentation, the calculation of the organization's budget, the assessment of the amount of revenue, etc. There are also optional, that is, additional criteria. The audited entity agrees on them in advance with the auditing authority. Examples of optional conditions are activities such as forecasting, deep assessment, advice, sanitation, and more.
Pre-scheduled audit
Finally, it is worth talking about the stages of audit planning. Control over an enterprise cannot be built just like that, careful preparation for verification is always needed.
The first step in planning a procedure is the pre-planned or contractual activity. This is the time from the will of the customer to the direct conclusion of the contract. The customer finds the required audit company, after which he himself determines the terms and forms of the audit. This is a very important step, becauselarge organizations have little time and opportunity to pay attention to regulatory authorities. In order to avoid problems in the form of sudden failures, and as a result, audit delays, it is necessary to think carefully about a convenient date for verification.
It should be taken into account that an external audit, and sometimes even an internal audit, is not a reason to stop the operation of an enterprise. The management of the legal entity will only be temporarily burdened with additional functions.
At the pre-scheduled stage of organizing an inspection, the customer must immediately prepare all the necessary documents. A complete list of securities to be issued to auditors can be clarified with the company itself, to which the customer applies.
The customer should immediately think about audit planning and audit program. The matter is that the program is not made only by one control instance. The customer himself should also take part in its development. Otherwise, something very inconvenient for the auditee may happen. For example, during the audit it turns out that a number of optional measures will be implemented that are completely unnecessary for the customer. To avoid this, special attention should be paid to the pre-planning stage of the organization.
Audit planning
Audit must be carefully prepared. This is done in two stages: the first, preplanned, we have already dismantled. Next comes the audit planning itself. There are two stages here: drawing up a contract and developing a program. Sometimes the contract is the program. Similarthe connection of documents is characteristic for the implementation of external verification. In other cases, the contract is an act that indicates the names, surnames, terms and methods of payment. The program is formed separately.
What is an audit contract? According to the law, this is an official document that indicates the ways of the relationship between the enterprise (customer) and the audit organization (executor). Since both parties are entrepreneurs, the contract is drawn up in accordance with the norms of civil law. It may contain essential and optional conditions. When planning an internal audit, it is possible to draw up several contracts for different stages of the audit. Here is what is indicated in the document:
- name of the parties, their contact details;
- rights and obligations of both parties;
- subject of the contract for the provision of audit services;
- terms of service;
- responsibility of the parties;
- cost of audit services.
In the place where it is said about the conditions for the provision of services, it is necessary to write about their terms and stages, purpose and object, as well as references to legislation. The paragraph about rights and obligations indicates information about the form of verification, the level of independence of each of the parties, access to the information base and disposal of working documentation.
Payment for services
An important place in the audit planning stage is occupied by the item on payment for services provided. According to the law, there are four legal forms of payment for an audit.
First formpayment is called a chord. It is appointed in advance and fixed in the contract before the start of the audit. Many auditors determine the amount arbitrarily, depending on the financial capabilities of the customer and the complexity of further work.
Time-based payment is widespread in today's service market. The contractor represented by the audit organization does not say the cost of the work in advance. The price becomes known only after the completion of the work. This is not the most convenient form of payment, because it is difficult for the customer to predict what price he can count on. Everything will depend on the time and complexity of the work being done.
The next type of payment is called piecework. The calculation of the price of one operation is determined by the customer's accountants and directly by the contractor. Piecework payment for services is the most convenient of those presented, since its form and price can be calculated in advance. As the order progresses, the audited entity may request additional work.
Mixed payment, the last possible form, is a combination of all the payment methods listed above. It is convenient to use this form of payment in large and complex enterprises. Various points are taken into account. This, for example, is the financial solvency of the customer, the selected forms of services, or the total number of financial statements.
Planning an audit is thus an even more demanding procedure than the audit itself. If the contractor is given priority in the implementation of the financial and economic audit, then only the customer should be involved in planning.
Stageschecks
Having considered the audit planning standards, we should talk a little about the financial and economic audit procedure itself. After planning, the auditors are distributed among departments and begin work. Each person implementing the check acts according to a special questionnaire prepared in advance. The questionnaire is a kind of methodological manual, which contains evidence received from the customer. Information from the manual is verified with real data. If a contradiction is found, the auditors will have to be alert. All organizational and functional problems will be recorded in a special protocol.
The depth of the audit depends on the form of the audit. If the verification is external, then there will be few performers. They probably won't even have to separate. They will quickly compare the real state of the enterprise with the data of the questionnaire, after which they will leave the organization. If the audit is internal, then everything will be much more serious. The performers will be divided into several groups, after which they will begin a thorough supervision of the production, organizational or functional area.
The closure of the audit is the same in all the listed forms of verification. A protocol is drawn up, which indicates the weaknesses of the organization, various inconsistencies, problems, threats, etc. The customer gets acquainted with the list and undertakes to correct all difficulties in the near future. As a result, a document is issued on the results of the audit.
