Companies must comply with audit procedures, including providing access to employees, contract documents, and financial data. Compliance audits focus on business practices and processes, while financial audits ensure compliance with accounting standards and regulations. Companies must be prepared to provide a wide range of documentation to auditors.
Companies must ensure that they do everything possible to comply with audit procedures. For compliance audits, this includes being available to speak with auditors, providing access to contractual documents, and allowing auditors to inspect various business processes. Those seeking to comply with financial audits must provide access to accounting and financial data, contracts, and personnel files.
Audits are a way to review a company’s practices and operations. They can be based on compliance or finance. Compliance audits focus on the actual operation of the business, including business practices and processes. Instead, a financial audit focuses on ensuring that the company complies with accounting standards and financial regulations.
Compliance auditing compliance begins with allowing auditors access to various officers and employees of the organization. This includes making sure that people in charge, such as managers, supervisors, and company officials, are available for interviews about business practices and processes. Compliance auditors may require access to employees at all levels to ensure processes are used as reported. Access to employees must be done in private without interference from supervisors, managers or other employees to ensure that auditors receive accurate and truthful information.
Providing access to contract documents is another way to comply with audit procedures. Contract documents that should be available include those related to management responsibilities, company ownership and any business procedures or processes. Another part of the compliance audit includes reviewing current practices and comparing them to documented or contractual business processes to help identify security issues.
Financial audits require companies to provide auditors with access to all relevant financial data. To comply with audit procedures, companies must be prepared to submit tax-related documents, bank statements, journal entries, and payroll. Other documents needed to complete a financial audit include bank statements, check registers, and a list of unpaid sick and vacation time.
Contracts and other business-related documentation will also be needed to help comply with audit procedures. This may include rental and lease agreements, as well as vendor contracts. Other documentation that will need to be provided to the auditors includes a list of board members, resolutions, and minutes of recent board meetings.
A wide variety of documentation and additional documentation may also be requested during a financial audit. Those seeking to comply with audit procedures must be ready and willing to produce personnel files, copies of previous audits, and legal invoices. Auditors may also request copies of paid and unpaid vendor statements or invoices related to petty cash.
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