An audit is the procedure of gathering and assessing the facts by a capable independent individual with reference to quantifiable data of a particular financial establishment in order to verify and report upon the variations found between the information prepared and the recognized standards, if any. The application of this notion to the financial statements of the organization is referred to as financial auditing. GAAS stands for ‘Generally Accepted Auditing Standards’ and gives explanation of a list of formal and informal rules recognized as the basis for auditors to provide financial auditing services and getting their performance reviewed. These are comprised of laws, proclamations from professional or regulatory institutions, lawful verdicts in cases relating to auditors. Every country sets these principles for itself.
The report prepared by the auditors, popularly known as audit report, comprises of their views regarding statements, the outcome of their concern on internal controls and conclusions on the assessment of the information in relation to compliance with the established criteria. They are required to be devised as per the General Accepted Accounting Principles (GAAP).So, an auditor tests that whether the on the whole, the financial statements are presented according to the set GAAP. Auditors, also comprehend the efficiency existing internal controls in the entity and suggest measures, if required, for the improving the effectiveness of these internal controls. The auditors will carry out an analysis to establish conformity of financial statements with the rules and regulations .In addition, the auditors will discuss with the management on the subjects of the ways of preparation of accounting information and evaluate this information for reliability through management’s reactions in the discussions, statements which have been audited, and other facts obtained during the inspection of the financial statements.
For the owner of a business in UK, it is complicated and a lengthy process to get financial audit done through its own staff. It would also prove to be an expensive process as well as the owner would still be worried as employees of the business may not be specialized in this area. Thus, in today’s corporate scenario, most of the businesses engage the firms which are expert in rendering financial audit which include financial auditing services and wish good bye to the auditing troubles.
Author of this article is an internal auditor of a well-known entity and offers quality best financial auditing to that entity.
