Audit of financial statements is the guarantee of the company's stability

The activity of any company is displayed in various kinds of accounting and financial accounting documents. The main purpose of drawing up such documents is to provide users with this information (management, investors, shareholders) a full picture of the life of the company for making certain decisions. In order to avoid errors and contradictions in the documents, audit financial statements. About the features of this procedure, we will discuss in this article.

In the course of its work, the company faces the need to document all the transactions that it conducted. This allows you to always have at your fingertips complete information about how the business is at the moment. Documenting operations takes place in several stages. First, all transactions are displayed in the so-called documents of the primary stage - contracts, invoices, commodity checks, and so on. Gradually information from these documents is transferred to more generalized registers, and from there - to reports. Naturally, accountants are living people who are also prone to make mistakes or deliberately change data. It is with the goal of preventing errors or fraud that an audit of the financial statements is carried out . Despite the fact that carrying out this procedure is quite expensive, there are cases when it pays for itself with interest.

Audit of the company's financial statements is carried out by special employees - independent auditors who pass mandatory certification and pass exams. The essence of their work is to check the documentation of operations at all stages and to identify existing inconsistencies. As a rule, the audit of financial statements is not carried out for all documents, but only for certain groups of assets or liabilities. This is due to the fact that a large enterprise (especially in the banking sector) can only check accounts receivable for about a week. Thus, before the beginning of the audit, the company management must determine which part of the documentation will need to be checked. Of course, there are cases of complete audit of the enterprise, but such checks are extremely long and expensive.

Audit of financial statements is as follows: first, the head of the enterprise and the auditor agree on the conduct of the audit. The auditor makes a brief introduction to the enterprise, and then draws up an audit plan, which is certified by the director of the firm. After that within the specified time, the audit itself is carried out, after which the auditor presents his findings to management. The conclusion can be positive (if there are no violations and errors detected), conditionally positive (if there are minor errors and the relative error does not exceed acceptable thresholds, usually 5 percent) or negative (if there are serious Violations in the conduct of accounting). The auditor bears personal responsibility for the results of the audit and, in the event that any facts of unconscientious performance of his obligations under the service agreement are discovered, the management of the contracting firm may file a claim for compensation for damage caused by the provision of incorrect information.

It is also important to note that the audit of financial statements is based on observance of such principles as independence of the auditor (absence of any connections between him and the company's management except contractual obligations), honesty, objectivity (impartiality and uniform approach to all clients), competence Special education and work experience), conscientiousness and confidentiality (non-disclosure of information obtained as a result of verification, to anyone except the client).