Audit exists to add credibility to the implied assertion by an organization's management that its financial statements fairly represent the organization's position and performance to the firm's stakeholders. The principal stakeholders of a company are typically its shareholders, but other parties such as tax authorities, banks, regulators, suppliers, customers and employees may also have an interest in ensuring that the financial statements are accurate. Audits exist because they add value through easing the cost of information asymmetry, not because they are required by law.
Lets move to the stages of audit procedure.
Financial audit is performed before the release of the financial statements (typically on an annual basis), and will overlap the year-end (the date which the financial statements relate to). The following are the stages of a typical audit:
planning and risk assessment;
internal controls testing;
substantive procedures;
finalization.
Next comes related qualifications.
There are several related professional qualifications in the field of financial audit including Certified General Accountant, Chartered Certified Accountant, Chartered Accountant and Certified Public Accountant.
Its better to demonstrate the essence of audit with the help of MGI Co. experience.
The purpose of audit is a confirmation by an independent expert, the auditor, of the companys financial statements reliability in general and concerning their separate aspects.
There are several kinds of financial audit:
Obligatory audit is an annual mandatory audit of accounting and financial statements of the company.
Voluntary audit is an examination conducted upon the request of the owners (participants) and shareholders by an independent audit company of accounting, financial statements reliability and their compliance with actual state, availability of reflected assets and liabilities, including reviews.
Special purpose audit is conducted in order to confirm reliability of accounting and reflection of the companys separate activity aspects in financial statements, for instance, accounting of inventories or the settlements with debtors and creditors, correctness of calculations and tax payments.
Tax audit is a type of voluntary audit, in the process of which is verified the correctness of the tax basis formation on all types of taxes and duties, timeliness of their transfer, correctness of tax Returns, also other significant aspects of taxation are considered.
Audit when reorganization, liquidation and bankruptcy of companies is performed in order to confirm the actual net value of assets and liabilities of the company.
Audit of solvency and financial position of clients and partners may be of interest for banks, when granting credits; for all companies, willing to ensure reliability of their potential partner.
Thats what I was planning to speak about on the point.
Coordinator Ilsiya Muhametshina:Thank you, Kristina.
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Coordinator Kate Pankova: Lets some it up
Coordinator Yulia Konstantinova: What is the finance, Kate?
Coordinator Kate Pankova: Let me explain it Finance. First comes Finance is often defined simply as the management of money or funds management.
Coordinator Yulia Konstantinova: Absolutely!
Coordinator Kate Pankova: Yulia, that you still can tell about the finance?
Coordinator Yulia Konstantinova: Lets move to types of Financial Institutions, then
There are:
t Banks
t Credit unions
t Stock brokerage firms
t Asset management firms
t Insurance companies
t Let me put you in the picture of it.
Coordinator Tatyana Andreeva: We have covered all the point of the agenda.
Coordinator Ilsiya Muhametshina: Yes, and Id like to stress the fact, that Financial Management means dealing with the financial activities such as procurement and utilization of funds of the enterprise.
