An independent assurance service level helps advisors quantify risk more effectively and protect their clients’ financials investments. Auditing and assurance services provide comprehensive services that go beyond financial statement audits. This article provides a comprehensive overview of auditing and assurance services, their benefits, and what they entail.
What is Auditing and Assurance Services?
Auditing and assurance services are a form of independent third-party analysis. Businesses and organizations seek out the services of independent auditors for assurance that their financial reporting processes are accurate and reliable. Auditing and assurance services include audit inspections, reviews, and audits of financial statements, as well as non-financial aspects of the business such as oversight of corporate governance, internal control systems, and risk management procedures.
Benefits of Auditing and Assurance Services
There are many benefits to using auditing and assurance services on an ongoing basis. Some of these advantages include:
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Improved Transparency: Auditing and assurance services help to ensure the accuracy and reliability of financial records and statements, so stakeholders and investors can make informed decisions.
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Enhanced Credibility: Connecting with a trusted partner helps to demonstrate credibility to potential partners, clients, and suppliers.
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Improved Operational Efficiency: Auditing and assurance services can help identify potential areas of improvement, streamlining office processes, and increasing overall efficiency.
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Reduced Risk: Auditing and assurance services help organizations identify potential risks and take steps to reduce them.
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Improved Performance: Auditing and assurance services provide feedback that can be used for better financial planning and implementation of strategies for improved operational performance.
What Auditing and Assurance Services Entail
When businesses use auditing and assurance services, they will generally receive the following services from their auditor:
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Financial Statement Audit: A financial statement audit assesses the reliability and accuracy of an organization’s financial statements. This includes an examination of their books and records to ensure they are in accordance with Generally Accepted Accounting Principles (GAAP), the Financial Accounting Standards Board (FASB), and the auditing standards of the Institute of Internal Auditors (IIA).
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Agreed-Upon Procedures: Auditors can be engaged to perform specific agreed-upon procedures, such as determining compliance with certain contractual terms or evaluating the effectiveness of internal control systems.
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Compliance Testing: Auditors can also provide assurance services to test for regulatory compliance, such as with laws or statutes, or organizational policies.
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Internal Control Review: Auditors are often requested to assess the effectiveness of internal control systems, which are designed to help maintain accuracy and reliability for the organization’s financial reports.
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Performance Audit: Performance audits provide assurance on the effectiveness of the strategies and operational performance of the organization. This includes a deep dive into expense accounts, operational practices, and performance in meeting goals.
Audit Failed? Options for Remediation
In some cases, an audit may fail to meet the standards required. In this instance, an organization has a few options for remediation:
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Repayment: If an organization is found liable for financial mismanagement or fraudulent practices related to a failed audit, they may need to repay any losses or over payments to their creditors.
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Redo Audit: The organization can conduct a new audit to test their financials and procedures. This can include a comprehensive internal audit, a financial statement audit, or an assessment of internal controls.
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Restructure Processes: Organizations can also restructure processes to increase accuracy and reliability, as well as seek assistance from an audit and compliance expert to help identify and remediate any specific issues.
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Investigating and Dispute Resolution: Organizations can launch investigations into any discrepancies or issues that have been identified by the audit and take steps to resolve disputes.
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Education and Training: The organization can also invest in training and education for their employees, ensuring they are familiar with their internal processes, procedures, and relevant industry standards.
Auditing and assurance services provide a wide range of services that can help businesses ensure accuracy and reliability, as well as mitigate risk. This includes audit inspections and reviews of financial statements, as well as oversight of internal control systems and risk management procedures. It is essential to have a trusted independent auditor to increase transparency, credibility, and performance. When audit failures occur, there are several options for remediation, such as repayment, redoing the audit, restructuring processes, investigating, dispute resolution, and education and training.
