Auditing is an independent examination of an entity’s historical financial information by a professional accountant with the objective of forming an opinion on the said historical financial information.
Assurance refers to a high degree of confidence. Parties engage professionals in assurance engagements in order to be satisfied that the subject matter is as purported to be.
Having the books of accounts of a company checked by an independent person who looks at them with a third eye adds to their credibility.
There users of the audited financial statements who value this credibility to a larger degree include:
- Government and the revenue authorities
- Service providers like insurance companies and financial institutions
- Other stakeholders like investors, suppliers and clients.
Whereas external auditing caters for outsiders of the entity whose financial statements are being audited, internal auditing is takes care of the management of the reporting entity. It is an objective, consulting and value adding activity that, among other things, aims:
- At improving the efficiency and effectiveness of the operations of the reporting entity
- To ensure safety of the reporting entity’s assets
- Compliance with regulatory and legal frameworks as well as internal operating procedures in order to reduce resulting risks.
Types of Auditing services provided.
1. Periodic audits.
These can be quarterly, semi-annual or annual audits depending on a client’s requirements. Annual audits for organizations are a statutory requirement for the sake of taxation, annual returns as well as accountability to members, financiers, creditors and the general public. It is not mandatory for sole proprietorships, however, it is a statutory requirement to make tax returns, and therefore audited accounts reduce the associated tax risks, and provide information on performance which is essential for business planning and control.
2. Internal Audits.
It is an important management and control tools for organizations which need to keep regular monitoring of their business performances for control purposes. We provide internal audit solutions which range from the total outsourcing of the internal audit function to outsourcing its supervision or setting out an independent internal audit function.
Some benefits of audits
- Determines economic performance of an organization.
- Helps in decision making
- Makes limited companies to comply with statutory requirements
- Helps in tax planning and management
- Helps in business planning, management and control.
- Detects errors and frauds
- Guides investors in making investing decisions
- Helps in raising of business finance.
- Determines economic value of organizations.