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Tips for Carrying Out an Audit Tips for Carrying Out an Audit Before an audit is assigned to staff, there are few matters that should be considered such as: If it is a private limited co. When the audit manager assigns a job to the senior, the first thing the senior does is to meet with all his team members to discuss about the job and to delegate duties to the respective members.
The previous year file is always used as a guide only. Staff must not copy blindly as the manager and partner will be annoyed. Staff must always tailor-make the audit for the year according to the events that occurred during the year.
The next thing the audit senior is supposed to do is to contact the client to make arrangements as to when the audit can commence. An audit should always be done at the clients place.
This is required in order to obtain all the information necessary for the audit. The client should also be available and free during the period in order to give the auditors all the required information.
The first time we visit the client is at the Planning stage. At this stage the audit senior normally discusses with the client about the performance of the client for the year such as increase or decrease in profitability and reasons for it, any new products launched during the year, any important staff that left the company and etc.
This is all documented in the Business Understanding Document. The audit assistants will normally be asked to carry out the test of controls in the company so as to ensure that the Payment Vouchers, Purchase Orders documents, Goods received notes and Delivery Orders are filed in sequential order and are properly authorized.
This is normally done on a sample basis and will be documented in the Process Analysis Document. Once the planning is completed, the file will be submitted to the audit manager for review.
The audit manager will review the file and raise any queries. The audit senior will then obtain the answers to the queries by contacting the client and updating the information which was left out. Once the planning is approved by the manager, then the audit team will get prepared to go in for the field audit.
Field audit is normally the longest period in an audit as this is the time we perform many testing of controls and substantive procedures. It is also very crucial as after the audit is completed it will normally be reviewed by the partner.
During the field audit, work will be delegated to staff appropriately — in order to complete the work within the timeframe. The type of work normally given to audit assistants will be the checking the cash and banks reconciliation sending bank confirmationaudit the property, plant and equipment to sight the fixed assets other payables search for unrecorded liabilitiesother receivables to vouch material invoices for deposits and prepayment.
The audit senior normally takes charge of the more important areas such as the inventory section valuation of stocktrade receivables debtors circularisation, analysing the agingtrade payables aging and sending confirmation to creditors to confirm balances and tax. Though the file will be sent for tax vetting, the senior is still supposed to prepare a basic tax computation and deferred tax verification.
During the field audit, there would also be a stock take conducted to ensure the movement of goods and treatment of obsolete stock. We do not count the stock except for a few samples. There would also be a statutory audit stat.
This is also required to ensure if there is any resolution passed during the year. Once all this is completed, the field audit is considered over. The problems usually faced by staff during an audit are: They will just direct us to others who also do not know much.
Client keeps on delaying documents that we need because they are unable to locate the documents or the documents are missing. Clients often gives us their own reasoning for any queries asked. It is very important to remember that client representation is not sufficient for an audit. Every explanation should be supported by documentation for example receipts, bank in slips, invoices etc.
For example taking time to show us supporting documents or explaining to us.What is a Tax Audit and Limit. Tax Audits are carried out under the Income Tax Act, It is basically the examination of your books of accounts and records to ensure that you are paying the appropriate taxes and also complying with the Income Tax Act.
Standards. The PCAOB establishes auditing and related professional practice standards for registered public accounting firms to follow in the preparation and issuance of audit reports. Before the audit takes place, a process plan should be agreed on which will identify how the audit will take place and who will carry out the audit.
Usually, HR representatives will be best placed to undertake the audit with additional support from other departments, such as IT or legal.
Human Resource Audit is a comprehensive method of objective and systematic verification of current practices, documentation, policies and procedures prevalent in the HR system of the organization.
A Day in the Life of an External Auditor - read this article along with other careers information, tips and advice on attheheels.com Tips for carrying out an Audit.
Before an audit is assigned to staff, there are few matters that should be considered such as: The size of the company to be audited. (If it is a private limited co.i.e. attheheels.com 2 or 3 staff will be required.