Question

Identify steps in the completion of an audit

What are some important communication discussed by the auditor upon completion of the audit

Answer 1

An audit is a formal check of financial statements and accounts of an organization or a business. There are two types of audit namely internal audit and external Audit. Whatever the type of audit may be there are six steps in audit process that should be followed for a successful completion of audit.

First Step- Requesting documents :

Audit of an organization is done based on the evidences or documents, hence Once the audit plan is decided the auditor asks for documents from the organization such as there legder, Receivables, Payables, invoices, customer orders, previous year audit report etc.

Second step - the information gathered or provided is observed and keeping into mind the structure of organization the audit plan is decided for the period.

Any risks associated and possible problems are identified beforehand while drafting the report.

Third step- Open meeting with the organization officials

Since there are audit clarifications to be made by the management officials to the auditor for his queries there is an open meet called upon by the auditor with senior management and administrative staff and various audit related factors are decided such as time period for audit and any timing isssues such as scheduled vacations are discussed and sorted out.

Fourth step- Fieldwork

After the information is gathered by the auditor from the open meet , he starts carrying field work by visiting the staff personally and get information regarding the working of the organization and clarification on the concern raised by him.

In this Fieldwork the Auditor tests the complaince and the policies of the company. Internal control checks are made by the auditor to make sure they are adequate. For any isssues noticed by the auditor expects the organization to respond to it.

Fifth step - drafting report

After all the clarifications are solved by the auditor which he had found while auditing, he than drafts a Audit report which contains all the facts and figures which are verfied to be ok and the data which was found to be wrongly posted or mathematically wrong. The Auditor than writes up a commentary on the findings and also recommends solution for the problem if any.

Last step - setting up a closing meet

After all the discussions are made regarding the good and bad found while auditing the auditor than waits for the Management's response on it whether it agrees with the findings or not and than the action plan of them to address the problem and projected date of completion. Any pending issued to be discussed or kept at last are also resolved at this point.