Different types of audits, including finance, government, compliance, and IT, test specific elements of a business. Audit guidelines vary based on the type of audit and whether it is mandatory or good practice. Financial audits check a company’s accounts, while government audits assess whether a company meets requirements to provide goods or services to a public body. Compliance audits cover laws and regulations, and IT audits cover computer systems’ security and reliability.
There are several different types of audits that can affect a business, each of which tests a specific element of the business. This includes finance, government, compliance, and IT. Audit guidelines will depend on the type of audit and whether it is a statutory and mandatory audit or just good practice.
The most well-known form of audit is a financial audit, which checks a company’s accounts. In many countries, publicly traded companies must have their accounts audited by an independent source: this helps to keep shareholders informed and ensures a fair comparison between different companies. Audit guidelines do not simply cover whether the numbers are accurate and calculated correctly. Rather, the guidelines also cover the assumptions used in preparing the accounts. Notable examples include how a company accounts for the depreciated value of an asset and how it handles the difference between receiving or making payment for a sale and the goods or services being delivered, particularly if payment and delivery fall in different accounting periods. .
A government audit assesses whether a company meets the requirements to provide goods or services to a public body. Here, auditing guidelines vary depending on the country and, in some cases, the specific agency. Issues checked may include financial stability, quality of service, and whether the company has been involved in corruption. Some government agencies will also check a potential supplier’s environmental record.
Compliance audit guidelines cover the laws and regulations applicable to a company. Some will be specific to an industry sector, such as health and safety guidelines for a construction company. Others will apply to all companies in a specific country. This can include minimum wage laws, working conditions and equal opportunity legislation.
IT and security audits cover different elements of a company’s computer systems. One aspect covered by an audit will be security: how a company’s network is protected from attack and what precautions are in place to prevent employees from misusing company data. Another important aspect is the reliability of the network, covering points such as whether it has built-in redundancy so that it can continue working even if some machines or systems fail.
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