The Basic Aspects of Accounting Audits

Actually to identify potential risk associated is the main purpose of accounting audit. It is doing by reporting financial data within certain departments or in the whole of departments. All these jobs are done by auditors. They deliver a professional assessment of a company's financial reporting processes and procedures which involve a thorough review of financial documents and accounting systems that keep the company's infrastructure. Here will be explained all aspects that involve in basic accounting audits.

1. Significance
All financial statements and accounting procedures need to comply with the general accepted auditing standard (GAAS), an accounting framework which has been adopted by many countries. Thus it is important to make sure whether all those statements and procedures have been well done. An audit work is very important since it helps to identify whether the company maintains a high standard of ethics in its financial department or not. It can also help to know whether the financial statements as well as all the reports are accurate or not. Thus accounting audits are made systematically to evaluate those accounting practices and procedures over a specific period of time.

2. Function
The responsibility of auditors is monitoring all accounting procedures and ensuring whether all financial statements meet certain criteria or not. As the accounting audit process normally consists of some stages which depending on the type of accounts that is audited and the size of the company, that’s why auditors usually work in teams to audit those accounts in several departments. They also need to check all records thoroughly.

3. The Process
The overall job flow consists of:
1. Submitting an announcement letter and conducting a preliminary survey.
2. Performing transaction testing and creating an audit summary.
3. Drafting a formal audit report and initiating an internal audit self-evaluation program.

4. Features
Sending an announcement letter about the audit to the company's financial department and setting up an initial meeting to explain what the audit will entail are what the review stage involves. Sometimes auditors begin their jobs by gathering relevant information about the company at this stage and request certain files, reports and other sources of financial documentation. By doing those work the auditors then create a set of financial statement assertions which based on all financial statements and data they get. The assertions include of:
1. Valuations of assets and liabilities, measurements of revenue and expense transactions.
2. Identification of recorded transactions.
3. Reports on all assets owned by the organization.

5. Considerations
The review phases of the basic accounting audit with the fieldwork and research stages are equally important. To make necessary changes to their internal processes and procedures clients who are undergoing the audit must be informed of the outcome. An end audit meeting between the team of auditors and the organization’s managers, the company then can make final comments about the review and ask questions about the findings to them. Sometimes an auditing team may also need to conduct further analysis and investigations to complete the project.