The Basic Steps of a Company Audit

The Basic Steps of a Company Audit

The basic steps include obtaining relevant work papers and test samples, critically evaluating the evidence, and examining alternative scenarios. Auditors must be thorough when reviewing the alternatives, and they must also remain vigilant for information that contradicts expectations and management’s position. The process is not complete until the auditor makes a decision. Here are the steps that every audit firm in Abu Dhabi should follow to complete an audit. Creating a timeline and communicating with stakeholders are just a few elements involved in conducting a thorough audit.

Obtaining work papers:

There are several reasons for obtaining work papers as part of a company audit. Federal banking regulators may request audit work papers if they suspect fraud. They may also want to assess the auditors’ internal controls. If the auditors cannot provide adequate answers, regulators may suggest a change of auditors. In addition, CPAs may worry about the confidentiality of their clients’ policies and data.

Obtaining test samples:

A testing period is a specified period when an auditor examines specific items or transactions for quality purposes. It may be a portion of the entire audit period or a shorter portion. The period must be complete, including the months or quarters of the year that will be tested, and it must include all documents in the audit. The number of records examined and the length of the test period will determine the size of the sample period.

Communicating with the audit committee:

The PCAOB has rules and standards regarding how the auditor should communicate with the audit committee. The auditor should also identify critical accounting policies and practices and participate in those discussions. However, this does not preclude other communications with the committee. Here are some best practices for communicating with the audit committee during a company audit. Let’s take a look at each one of them. Ensure you have the right information for the right audience.

Getting support from senior management:

Getting support from senior management is a critical aspect of company auditing. Although the process may be complicated, the audit can be beneficial for both parties. It will often assure senior management that the process is being carried out correctly and will give insight into the problems affecting the business.