Financial Statement audit is defined as an independent examination of the company’s financial statement and its disclosures by auditors and provides with a true and fair view of its financial performance.
Financial Statements to Audit
SNR ASSOCIATES, financial statement auditing services are available as well. Our certified accountants will do a comprehensive examination of your financial statements and accompanying disclosures. We will attest to the truthfulness and fairness before issuance of your financial statements.
Procedures of financial statement audit
- Planning and risk assessment:We will do a methodical planning of how to carry out the audit by gaining an in-depth understanding of the business and its environment. After which, the first and foremost step would be to evaluate and assess the risk of having misstatements in the financial statement. The audit procedure will be customized organization to organization as per its needs and requirements. In case of a high risk, rigorous accounting procedures shall be applied whereas in case of a low risk, our team will be a bit lenient regarding the audit procedures.
- Internal controls testing:Internal controls refer to the set of activities and procedures integrated into the system to avoid any sort of fraud or error in relation to the transactions entered or safety of stock and assets. Usually the main concern in this area is segregation of duties, authorization process and safeguarding of assets. Testing of internal controls also make part of the audit risk. A strong internal control makes audit a bit less lengthy and detailed whereas a weak internal control system would require extra diligent audit procedures.
- Substantive procedures:Based on the planning and risk assessment, substantive procedures will be performed for each line item booked on the financial statements or disclosed in the notes to accounts. Our services at SNR ASSOCIATES would include the following few procedures as well as others as per your business needs:
- Cash– Review of bank statements, petty cash, count of on-hand cash, interviewing the cashier, bank confirmations, and review of bank reconciliation statement.
- Accounts receivable– End balance check, reconciliation statements, negative and positive confirmations, testing of cut-off procedures and yearend sale.
- Inventory– Physical stock count, examination of supplier invoices, testing of cut-off, receiving and shipping procedures, obtaining confirmation of inventory list at other locations, testing of computation of allocated overhead etc.
- Accounts payable– Confirm balance, test cut-off procedures.
- Assets– Observation of assets, authorization of purchase and disposal, recalculation of depreciation and amortization, testing for impairment and verification of market value.
- Revenue– Review of sales invoices, sending negative or positive confirmations to customers, review subsequent transactions including sales returns or abnormal cash discounts or abnormally high prices.
- Expenses – Examine and review all the bills and any subsequent transactions.
The objectives of a Financial Statement Audit
The objective of a financial statement audit is to enable the auditor to express an opinion on financial statements Audit prepared by the management of the entity.
For this, it is essential that financial statements are prepared as per the recognized accounting policies and practice and relevant statutory requirements, and they should disclose all material matters.
However, his opinion does not constitute an assurance as to the future viability of the enterprise or the efficiency or effectiveness with which its management has conducted the affairs of the enterprise.
Responsibility for Financial Statements Audit
Below are the Responsibility for the financial statements-
The management is responsible for maintaining an up to date and proper accounting system and finally to prepare financial statements.
The auditor is responsible for forming and expressing an opinion on the financial statements.
The audit of the financial statement does not relieve the management of its responsibility.