Corporate audits review a company’s financial information, with internal audits ensuring compliance and external audits checking accuracy. Preparation involves scheduling meetings, creating a client-prepared list, and holding a follow-up meeting. The fieldwork phase involves interviewing employees, and the final meeting includes all key individuals affected by the audit.
A corporate audit is an internal or external review of a company’s financial information. An internal audit is a review by a company’s staff to ensure compliance with specific corporate requirements. External audits review a company’s financial statements for accuracy, validity and adequacy. To prepare for a corporate audit, the company should schedule a meeting with the auditors, prepare copies of the financial information for review, work with the auditors during the fieldwork phase, and hold a follow-up meeting. Internal audits can be less formal than external audits.
A meeting is always required to prepare for a corporate audit. Initial meetings focus on hiring a competent auditor with a decent track record. Once hired, the company and auditors move forward in creating a schedule. The audit schedule depends on the duration of the audit, the breadth of the review processes and the cost the company is willing to pay. Other items may come up during the meeting that require decisions by the company or the auditors.
A client-prepared list includes all information that will be subject to review during the corporate audit. The kick-off meeting is where the auditors learn about the company’s operations and create the client-prepared list. The company is responsible for collecting this information and preparing it for the corporate audit. A company typically needs to create copies of the original information, as auditors will not return these reports. This information remains with the audit firm as part of the audit evidence.
The fieldwork phase is where most of the audit work takes place. During the fieldwork phase, the company often needs to prepare for interviews with auditors. During a corporate audit, auditors interview and observe a company’s workers in order to verify that the company operates and maintains compliance with internal or external rules. To prepare for this phase, the company needs to schedule a time and inform employees about the audit. This allows employees to understand how they can best help your company.
Companies need to prepare for the final audit meeting, as this is where auditors explain their findings and issue the report. This meeting needs to include all key individuals who will be affected by the audit. The meeting should last no more than a few hours. In some cases, the accounting or auditing firm will attend the meeting. Preparation for this meeting usually begins with a review of audit findings that lead to questions about the process.
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