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Audit

ANNUAL AUDIT

The annual audit is simply a verification method of the company’s monetary systems and statements. The auditor can examine the accuracy of the numbers and therefore the processes and allow to understand if control steps ought to be taken to assist defend company against fraud.

What is an Annual Audit?

The annual audit is simply a verification method of the company’s monetary systems and statements. The auditor can examine the accuracy of the numbers and therefore the processes and allow to understand if control steps ought to be taken to assist defend company against fraud.

The final audit takes place solely when the tip of the commerce amount is once all the transactions for the complete year area unit are fully recorded and balanced; commerce and Profit & Loss Account, and record are ready. The auditor carries on his audit work unendingly until it’s completed.

The auditor gets hold of the books of accounts, documents, vouchers, bills and full facts about the accounting amount below review.

In an associate annual audit, the auditor visits his shopper one time in an exceedingly year, and also the audit work is commenced and completed in an exceedingly single uninterrupted session.

This type of audit is incredibly a lot of convenient and helpful for business homes, that area unit little. For giant ones, a continuous audit is additionally helpful because the work concerned in them is voluminous and therefore final accounts cannot be ready at the end of the year.

The purpose of the statutory audit is to supply associate freelance opinion to the Shareholders on the reality and fairness of the monetary statements, whether or not they are Properly ready in accordance with the businesses Act 1985, and to report by exception To the shareholders on the opposite needs of company law like wherever, in the Auditors’ opinion, correct accounting records haven’t been unbroken. Administrator’s square measure delegated. Responsibility for managing the affairs of the corporate and also the audit is a very important, Mechanism that helps house owners of firms assess the post of administrators, and in so Doing provides very important stimulation for administrators to position correct stress on their Fiduciary responsibilities.

What are the advantages of an Annual Audit?

The advantages of a periodical or annual audit are as follows:

  1. No Dislocations within the Work of Client: just in case of an annual audit, because the auditor visits the client’s workplace just the once a year the work isn’t unnecessarily disturbed.
  2. Less probability for Alteration of Figures: As audit work is finished solely in an exceedingly one continuous session, a probability for alteration of figures is minimum.
  3. Less Expensive: it’s a less costly system and appropriate for little business homes.
  4. Takes solely affordable Time: The audit work may be finished quickly among an affordable time.
  5. Correct Maintenance of Link in Work: As audit work is finished and completed in an exceedingly continuous session, link in work may be properly maintained.
  6. Straightforward Allocation of Work: In a continuous audit, work may be allotted simply in keeping with the time schedule.

What are the disadvantages of an Annual Audit?

Following are the disadvantages of an annual audit:

  1. Additional possibilities for Fraud: Auditor might not be ready to check and verify all the transactions. Thence there’s a probability that a number of the errors and frauds could also be left undetected.
  2. Delay: The audited accounts might not be obtainable forthwith once the shut of the year. It should cause a delay in the declaration of dividends and beholding annual general conferences. The choices of significant importance could also be delayed thanks to the dearth of audited and verified info.
  3. No In-depth Checking: In an annual audit, careful checking of accounts isn’t doable for the auditor. Thus, there’s a larger probability of errors and frauds being left undetected.
  4. Unsuitable to massive Scale Concerns: for big-scale considerations, a periodical audit isn’t practical and it’s not fashionable for them.

PREPARING THE AUDIT

Upright groundwork is crucial to enable Auditors to achieve an understanding of the company to be audited and to recognize the main parts of risk. The first audit of any company will take longer to organize because it is important to research and profile the trader. Having selected a company for audit the primary stage is to assemble a profile of the business.

The initial questions are:

  1. What is the business or trade of this organization?
  2. What is the scale of the business? e.g. what is the exposure for duty?
  3. What duty is paid?
  4. Who are the principals of the business?
  5. What are the most important (both in volume and value) imports and/or exports of the business? For example, which items/HS codes does the company deal in?
  6. What are the main countries of origin/destination for imports/exports?
  7. What are Customs or control regimes involved?
  8. What is the Revenue history of the business? E.g. compliance record.
  9. Was the company audited/investigated before by Customs? If so, what were the results?
  10. Was the company audited by another section of Federal Board of Revenue recently? If so, what was the outcome?
  11. For most businesses, all of the above information is quickly available.

 

Information regarding the character, principals and Revenue record of the business shall be available on TPR. Results of previous Customs investigations can also be available in some cases, and knowledge regarding traffic flows are going to be obtained by using the info of HDS.

RECORDING THE AUDIT

It is important that everyone’s audit work is completely recorded. Associate degree audit diary ought to be maintained and also the audit team ought to prepare most of the queries before every visit and record the responses within the audit diary. Moreover, the extracts of records examined can also be noted down. Notes taken throughout the audit ought to be capable enable a comprehensive report back to be compiled clearly showing the steps taken throughout the audit?

Audit workers ought to acquire ample relevant and reliable proof to create a sound basis for a conclusion. These notes can type a part of the audit file and will be utilized in Court proceedings at a later date that excludes evidence.

AUDIT REPORT

Audit Report should be completed at the top of each audit. It’ll detail the results of the audit and permit for the Auditor to record any comments which can be of help in future audits. The box for “agents” ought to be completed with the names of the most Customs Clearance agents concerned in any audit wherever errors square measure discovered.

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