The audit is the analysis carried out to the departments of a company, basically there are two types of audits, internal and external, in this case an external audit is a critical and systematic examination which is duly detailed, which is made to an information system used by any type of company.
There are a number of phases that must be met within an external audit for it to be successful and help improve productivity of a company or organization.
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In this article you will find:
Audit planning
The audit of financial statements requires adequate planning to achieve its objectives in the most efficient way possible. Of course, the detailed planning of some procedures cannot be done with exactitude unless it is recognized the result of some others, therefore, there must be an initial plan to be reviewed on an ongoing basis.
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Planning objectives
Planning involves developing the audit strategy in accordance with the work to be carried out in order to minimize the risks to an acceptable level for the auditor.
The objectives for planning are:
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- Focus work on important areas.
- Solve potential problems in a timely manner.
- Organize and properly manage the audit work so that it is performed effectively and efficiently.
- Assist in the selection of work team members with appropriate levels of skills, as well as the competence to respond to the anticipated risks and the appropriate assignment of work to themselves.
- Facilitate the direction and supervision of the members of the work team, as well as the review of their work.
The auditor's objective is to plan the audit so that it is carried out effectively, for this it is required that the work be focused on the important areas, solve potential problems in a timely manner as well as appropriately managing and organizing the audit work so that it is performed effectively and efficient.
The external audit is beneficial for the company since in its verification and control process it gives us a different perspective, since it leaves us an impartial examination and the total area to study, provides validity, discovers errors that an internal auditor does not want to show, also presents complete, truthful and verifiable.
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Behavior of the external auditor
The external auditor must have a impartial behavior, be ethical in their activity, not accept bribes in addition to being careful in the information, keep the information safe and not recriminate.
Disadvantages of external audit
Within the external audit there are also some disadvantages, such as ignorance of the company hired to carry out the audit, this can generate distrust with the result final.
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The results can be managed or controlled by the contracting company, since in some cases not all the information is provided necessary for the auditor to analyze the data in a truthful and timely manner, generating a distortion in the result in favor of the business.
Importance of a risk-focused external audit
In a globalized world, business becomes more complex and every day more and better tools are required to facilitate the understanding of the environment, the complexity to which organizations are subject is caused by constant technological change and the easy implementation of the same. The sophistication of customer needs in addition to intense business competition.
Due to the above, the current auditor must pay greater importance and knowledge about the client's business and industry and its interactions with its environment, taking into account that Within this complex environment, risks are generated that, when they materialize, can significantly affect the company's business, to the point of jeopardizing the continuity of the business. deal.
A risk focus It will allow the auditor to identify business, fraud and process risks and evaluate the design and effectiveness of the controls that mitigate them.
Types of risks
There are several types of risks that are identified in a risk-focused audit.
Business risks
It refers to those factors that can cause the company not to achieve its objectives, for example, a country with revaluation may put at risk the business continuity of the company that export.
Fraud risk
An inappropriate segregation of functions can generate fraud for the company, which is why all tasks must be delimited from the planning in the articles of incorporation.
Process risks
It refers to those factors that can cause the company's processes not to meet its objectives, for For example, new or poorly trained staff can lead to errors or irregularities in state figures financial
We can conclude by saying that external audit It is a very important tool for any company, which will help it to always stay in growth, since it provides the confidence of quality and makes the company position itself in the first places of the market. The auditing company shows the neuralgic information of the company's processes, so that they are improved.
