The main purpose of the audit of financial statements is to increase the level of client confidence in the data presented in it, which is of great importance for ensuring security of state financial turnover. Confirmation of the accuracy of the data specified by the company in the financial statements looks like a written opinion on the reliability of these statements from an independent auditor - a tax expert.
During each audit, the auditor seeks to determine whether the financial statements and related accounting records contain material inaccuracies. In examination, the auditor confirms that the financial statements present true and correctly recorded information about the property and financial position of the company, and its financial results. When conducting the audit process of financial statements, the auditor draws attention to compliance with the provisions of the Accounting Act.
This type of check should not be taken as something for which you can subsequently receive a fine, or other administrative punishment. The auditor only checks the financial statements, after which he draws up an act where he indicates all the errors, and the company on the basis of this act can correct all the errors.
The stages of the audit of financial statements
- The first stage of the audit is always the immersion of the auditor in the scope of the company. Verification of financial results, general financial situation, determination and verification of the company's management vertical, analysis of the work of the internal control program and accounting. After the introductory analysis, the auditor begins to look for possible problems related to the type of activity of the company, or other factors.
- Next, control is carried out, which is divided into two stages. The first stage is carried out before the end of the fiscal year, and the second after the end.
- The auditor writes his conclusions in the relevant act and transfers them to the management of the company. Further, the company should familiarize themselves with the act and, if violations are detected, correct them.
Advantages associated with conducting an audit of financial statements in an organization
- The audit allows us to verify the correctness of the data entered into the financial statements.
- Inaccuracies discovered during the control, and deficiencies in the accounting system are valuable information for management and managers. Professional recommendations obtained as a result of the audit help to limit the risk to which the enterprise is exposed when its internal control system is ineffective, or leads to many errors.
- The control increases the confidence of users in the further analyzed financial statements. Confirmation of correctly prepared financial statements is a good sign for potential investors and the banking system. Thanks to this, the company can begin to grow even faster.
Which organizations are required to remember to conduct an audit of financial statements?
In accordance with the current law (Article 64, paragraph 1, of the Accounting Law), the financial statements of the following companies are subject to mandatory audit:
- State banks, branches of credit organizations, branches of foreign banks, insurance companies, branches of insurance companies, foreign investment companies, branches of foreign investment companies, savings and credit companies;
- Legal entities involved in securities trading, investment funds and funds with an alternative type of investment;
- Legal entities that are pension funds;
- National payment institutions and institutions involved in virtual currency;
- Joint-stock companies, with the exception of companies located in the organization during the preparation of financial statements;
- Other organizations (including limited liability companies) that in the previous financial year for which the financial statements were prepared, met at least two of the following conditions:
- the average annual full-time employment was at least 50 employees,
- the total assets of the balance sheet at the end of the fiscal year amounted to at least EUR 2.500.000 equivalent in PLN,
- The net proceeds from the sale of goods, services and financial transactions for the financial year amounted to at least EUR 5,000,000 equivalent in PLN.
An audit also covers the financial statements of acquired companies and newly created companies (if these companies fulfill two of the above conditions) spent for the year in which the purchase / creation took place.
Audit should not be afraid and avoided, as first of all it will help your company to develop, understand and solve the auditor's problems. Our company can help you find an auditor who will help your company grow and generate more income.