Conducting an audit for the first time? Pay attention to these
Start-Ups are the future drivers of the country’s economy. The unconventional approach towards solving problems and creating value through innovation, analysis and intelligence are traits of the start-up ecosystem. Start-ups working capital requirements are fulfilled by many rounds of funding by suitable venture capital companies and private equity funds. In the journey of the start-ups, the company and its products can achieve growth and may attract big players looking to invest or acquire the start-up.
Investors and bigger companies looking at the acquisition options will always consider internal and external factors before proposing. The internal factors may relate to the work ethics, staff pay, accounting practices etc. The start-ups may require to submit independent audit reports confirming that best accounting practices are followed to gain the confidence of the investors and acquisitors. So, all companies are required to conduct an audit as required. Companies also need to pay attention to certain things before conducting an audit for the first time.
Ensure Accounts are in Order
The company’s accounting team has to collect all relevant financial records and prepare them for the audit. The financial records must be sorted and maintained in an orderly manner. At the time of the audit, the auditor team should not spend too much time and effort tracing the required financial data and documents that will adversely affect the conduct of the audit process and delay the planned exercise.
The latest accounting software could be used for sorting, storing and tracking all the company financial data. Adopting the latest technology provides companies easy access to all the documents necessary for an audit anytime. In addition, the structured data will be beneficial for future audits and inspections.
Companies must read and understand the applicable accounting industry standards. The companies must also understand the approach of the auditors carrying out the audit. External consultants with the necessary qualifications and experience can help companies regarding the audit scope and preparations required.
Collect and Sort Documentation
Company management must ensure that all the internal procedures are designed and implemented across the organisation. The companies will need to provide all the supporting documents at the time of the audit. The auditor will require the company policy documents, all financial statements of the period, and other necessary documents such as bank account statements, inventory ledgers, payroll documents, tax filings and invoices generated. The management must prepare all the relevant documents showing current internal controls and ensure the internal controls are followed. The External Auditors will demand all supporting materials to carry out the audit process.
Prepare the Company Staff
The company audit process is carried out by the external auditor, who needs to collaborate with the company employees. Therefore, the staff may have to communicate with the auditor team throughout the audit process effectively. Additionally, the company management can prevent any productivity loss during the Financial Audit by readying the relevant staff for assisting the auditor team during the audit. Therefore, the communication of the staff with the auditor must be part of their work, and the company should create special attention for the involved staff to enable smooth staff-auditor communication.
Testing of Controls
After formulation and implementation of process controls in the business, all companies should test the effectiveness of these internal controls. It is one of the major checks in the audit procedure. Hence, companies must thoroughly examine all the relevant internal processes that the auditor may examine during the audit. In addition, after the testing of controls, companies should employ all necessary corrective measures to ensure that all the controls required by the standards are in place by the audit date.
How Can We Help?
Our Team at Jaxa Chartered Accounts are well versed in the process of accounting services and auditing services with several years of experience working with both local and international clients. Our consultants have served clients from across the business industry with companies from different sectors. We advise our clients in all financial matters and assist them in setup bookkeeping and accounting processes as per the required standards. Please Contact Us for any assistance with accounting and auditing. We’d look forward to assisting you!
