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Audit

Auditing is to collect and analyze data to assess the financial status of the company, and then make a conclusion and report on the degree of correlation between the data and generally accepted standards.

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1. Common financial audit:

1. Operational audit (operational audit): Review the organization's operating procedures and methods to assess its efficiency and effectiveness.

2. Performance audit (compliance audit): Assess whether the organization complies with procedures, codes, or regulations set by a higher authority.

3. Financial statement audit: assessing whether the financial statements of a company or group are prepared in accordance with generally accepted accounting standards, generally performed by independent accountants.

4. Information technology audit: assess the security, integrity, system reliability and consistency of the information system of an enterprise or organization.

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2. Practicing qualifications

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In addition to holding a professional certificate (Certificate) from the Accounting Board (Accounting Board) of each state, a license is required to practice in that state. Note that the license may not be common in other states. Members must practice in other states. To apply to the state committee, most states require 1-2 years of work experience.

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3. Audit report

After the auditor completes the audit work, he will report the findings and results to the users of the financial statements. The audit report describes the scope of the auditor's work, the responsibilities of the preparer (management or director of the company) and the auditor, and the presentation of the auditor's conclusions. When the auditor believes that the financial statements contain no material misstatements, they will issue a report containing standard unqualified opinions, stating that the financial statements fairly and truthfully reflect the company's financial status on the settlement date and the profit and loss situation during the accounting period.

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4. Collection of audit evidence

In order to complete the audit work, the auditor must collect sufficient evidence. The usual implementation methods are as follows:

1. Check tangible assets: used for tangible assets, such as inventory, cash, fixed assets, and securities.

2. Correspondence: To send a letter of inquiry to the other party to prove the existence of the matter confirmed by the letter. Applicable to bank deposits, bank loans, and accounts receivable.

3. Check documents and records: including invoices, receipts, and delivery notes.

4. Analytical procedure: Use comparison and relationship to evaluate whether the numbers are reasonable.

5. Inquiries: In writing or orally, questions are sent to the company's customers.

6. Recalculation: including checking whether the calculation is accurate.

7. Re-execution: Check whether the internal control of the audited unit is implemented in accordance with the prescribed procedures.

8. Observation: Check the general environmental conditions of the company's customers and the working methods and procedures of employees.