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 External Audit Services
In today’s changing world, CEOs and CFOs, as well as Audit committees and
others charged with governance are held accountable as never before. Companies
need independent, objective audits to help maintain their reputation and the
public’s trust. The external audit or financial audit aims to
fill this gap.
What is an External Audit?
- An audit is the examination of the financial statements of an
organisation by someone independent of that organisation.
- The financial statements include a balance sheet, an income statement, a
statement of changes in equity, a cash flow statement, and notes comprising
a summary of significant accounting policies and other explanatory notes.
- The purpose of an audit is to form a view on whether the information
presented in the financial statements, taken as a whole, reflects the
financial position of the organisation at a given date, or for a period
ending on that date. For example:
- Are details of what is owned and what the organisation owes properly
recorded in the balance sheet?
- Are profits or losses properly assessed?
- When examining the financial report, auditors must follow auditing
standards which are set by a governing body.
- Once auditors have completed their work, they write a report (called an
audit report) explaining what they have done and giving an opinion drawn
from their work.
- With some exceptions, all organisations subject to the Companies Act must
have an audit each year. Other organisations may require or request an audit
depending on their structure and ownership or for a specific purpose.
What do auditors do, specifically?
- Auditors determine the type and extent of the audit procedures they will
perform depending on the risks and controls they have identified. The
procedures may include:
- examining financial and accounting records, other documents, and
tangible items such as plant and equipment.
- watching certain processes or procedures being performed.
- asking a range of questions - from formal written questions, to informal
oral, questions - of a range of individuals within the organization.
- obtaining written confirmations of certain matters; for example, asking
a debtor to confirm the amount of their debt with the organisation.
- testing some of the organisation’s internal controls.
- making judgments on significant estimates or assumptions that management
made when they prepared the financial report.
- Auditors maintain independence from management and directors so that tests
and judgments are made objectively.
- Auditors discuss the scope of the audit work with the organisation. The
directors or management may request that additional procedures be performed.
Despite its statutory nature, clients are demanding more from the external
audit and ThePractice is equipped to meet those expectations with its value
added audit concept. We are constantly looking at ways to enhance our
procedures to provide our clients with information which will enable them to
successfully meet their unique business challenges.
Auditor independence is vital to the users of audited financial statements.
We actively enforce both professional and internal standards of independence and
monitor our activities and relationships to ensure that the standards are
maintained.
Call ThePractice at (876)-927-4592 or (876)
927-4593 or
email us at info@thepractice-jm.com
for information about our External Audit Services Today.
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