In going about our business, we auditors will often throw around the term “audit” like the whole world knows what we’re talking about. For those of you too polite to ask, let’s talk about what we do in an audit.
At heart, an audit is an examination. As independent auditors, we are engaged to examine your financial statements, the processes that you use to input your financial data, and the safeguards you have put in place to prevent and detect fraud and/or error. While it may sound intimidating, we really don’t mean it to be so. For clients who need an audit, it’s helpful to look at the experience as an opportunity to ultimately improve and streamline your organization.
An audit begins with a site visit. We will schedule a meeting with you at your office to ask you many questions about how your organizational systems are set up, who is responsible for various processes, and how you work on a daily basis. Depending upon what you tell us, we may offer friendly suggestions on improvements.
As a part of the audit, we will ask you for various organizational documents. Some examples are:
We will use the documents gathered to run analytical ratios and compare the period currently being audited to the previous time period. Additionally, we will look over the processes that you use to ensure that your financial data is reliable and accurate. These are called internal controls.
As the audit progresses, we may ask you more questions or require more documents. This is not unusual and should not be a cause for alarm. As we find items that either need to be adjusted to make them materially correct or to present them in the format prescribed by U.S. generally accepted accounting principles, we will add them to a list of suggested journal entries for you to review.
At the end of the audit process, we will prepare an auditor’s report, and it will express an opinion on whether or not your financial statements are fairly stated. This is not a cause for worry as we will be communicating any issues that we find that would affect our opinion during the audit.
As auditors, we are evaluating that your financial statements as presented are materially correct. We are not engaged to judge the quality of your organization or the fitness of your management, so you don’t need to feel nervous around us.