Audit services are external reviews of a company’s financial or business information for various purposes. Types of audits include financial, operational, compliance, information technology, and consulting services. Auditors test financial information against standardized accounting principles. Compliance audits ensure companies follow specific guidelines, while IT audits ensure proper technology use. Consulting services determine the type of audit needed and its cost.
Audit services are an accounting function offered by public accounting firms or private certified public accountants (CPAs) in the business environment. Audits are typically an external review of a company’s financial or business information for various purposes. Companies typically use audits to assure corporate stakeholders that the company’s financial information is accurate or that the company operates within a specific set of guidelines. Common audits used in the corporate environment include financial, operational, compliance, information technology, and consulting services.
Financial audit services are perhaps the most common type of audit. These audits include a review of the company’s financial accounting processes and measure the company’s ability to record and report financial information to internal and external stakeholders. Auditors usually test the company’s financial information against a standardized set of accounting principles, such as the Generally Accepted Accounting Principles (GAAP) in the United States (US) or the International Financial Reporting Standards (IFRS) used in many countries.
Operational audit services help ensure that individual business departments of a company are operating according to specific corporate standards. While companies may use external auditors to perform this function, company employees may also conduct operational audits. When the company’s employees conduct the audit, it is commonly referred to as an internal audit. Internal audits are generally less formal than external audits and are mostly used for management review.
Compliance audits are carried out to ensure that companies are following a specific set of guidelines, usually by an external organisation. These audit services can be used by government regulators, insurance companies, or professional organizations that give companies a professional designation. The Occupational Safety and Health Association (OSHA) is an organization in the United States that uses compliance audits to ensure that its members meet certain corporate operating standards.
Information technology audit services are conducted by external auditors to ensure that companies are properly maximizing the company technology currently used in their operations. This audit usually examines the individual corporate technology components used by the business and ensures that there are no opportunities for internal or external abuse. Companies with high levels of business technology, such as Internet retailers or business fulfillment firms, may request more information technology audit services to ensure that important business information cannot be compromised by hackers or viruses and worms.
Consulting or auditing services may be offered by public accounting firms as an initial review of a company’s business operations. These services are generally less intensive than traditional audits. Consulting and consultancy services are normally used to determine what type of audit a business may need and how much it may cost. Public accounting firms that provide consulting services may not be able to conduct an audit of the firm, depending on the industry accounting rules and regulations of the specific jurisdiction.
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