Audits
We often get asked about the types of audits we undertake. There are many type of audits and the ones we undertake include:
- Compliance audit. This is an examination of the policies and procedures of an entity or department, to see if it is in compliance with internal or regulatory standards. This audit is most commonly used in regulated industries or educational institutions.
- Forensic audit. Also refer to forensic accountancy, forensic accountant or forensic accounting. It refers to an investigative audit in which accountants with specialised on both accounting and investigation seek to uncover frauds, missing money and negligence.
- Construction audit. This is an analysis of the costs incurred for a specific construction project. Activities may include an analysis of the contracts granted to contractors, prices paid, overhead costs allowed for reimbursement, change orders, and the timeliness of completion. The intent is to ensure that the costs incurred for a project were reasonable.
- Suppliers audit. Many companies will audit their Suppliers from time to time to ensure that the supplier is big enough to use, has the requisite assets and has enough cash flow to find themselves as a going concern.
- Financial audit. This is an analysis of the fairness of the information contained within an entity’s financial statements.
- Investigative audit. This is an investigation of a specific area or individual when there is a suspicion of inappropriate or fraudulent activity. The intent is to locate and remedy control breaches, as well as to collect evidence in case charges are to be brought against someone.
- Operational audit. This is a detailed analysis of the goals, planning processes, procedures, and results of the operations of a business. The audit may be conducted internally or by an external entity. The intended result is an evaluation of operations, likely with recommendations for improvement.
- Tax audit. This is an analysis of the tax returns submitted by an individual or business entity, to see if the tax information and any resulting income tax payment is valid. These audits are usually targeted at returns that result in excessively low tax payments, to see if an additional assessment can be made.
- Due diligence audit. When a company or business is due to be sold, the Purchaser will often organise a Due Diligence Audit. A thorough due diligence will consider financial matters, customer composition, staff and employment issues, material contract, intellectually property and environmental issues amongst a myriad of other factors.
- Payroll tax audit. Payroll tax is a self-assessed State base tax and it is often overlooked by businesses. Australian State and Territory Revenue Offices regularly conduct audits and investigations to ensure all liable employers are complying with their legal requirements under payroll tax legislation. Penalties are imposed if employers fail to register and when it is identified that an employer has provided false or misleading information in submitted payroll tax returns or in response to requests for information.
- Workers compensation audit. All NSW employers require workers insurance to protect their workers against workplace injury or illness. Insurance and Care NSW (icare) and Insurance companies conduct audits to ensure the employers are paying the correct premium. An auditor has a legislative right to access an employer’s wages records under section 174 of the Workers Compensation Act 1987. The audit will generally cover the last 4 financial years plus the current financial year.
- Self-Managed Superannuation Fund (SMSF) audit.
The four main steps in the auditing process
There are four main steps in the auditing process. The first one is to define the auditor’s role and the terms of engagement which is usually in the form of a letter which is duly signed by the client.
The second step is to plan the audit which would include details of deadlines and the departments the auditor would cover. Is it a single department or whole organisation which the auditor would be covering. The audit could last a day or even a week depending upon the nature of the audit.
The next important step is compiling the information from the audit. When an auditor audits the accounts or inspects key financial statements of a company, the findings are usually put out in a report or compiled in a systematic manner.
The last and most important element of an audit is reporting the result. The results are documented in the auditor’s report.
Need help?
If you require any of the above audits, please do not hesitate to contact us for a quote. Please contact The Quinn Group on (02) 9223 9166 or submit an online enquiry.
