Under definition financial audit implies a comprehensive check of the economic condition of the organization, as well as an assessment of the prospects for its development.
In modern domestic practice, financial audit is more often seen as a very narrow concept, usually including only classical audit. financial reporting. Also close to financial audit is the concept of investment audit - expert opinion about the targeted and most effective use investment resources companies.
The purpose of such an independent audit is an assessment of the correctness of the conduct accounting in the audited company, as well as verification of the reliability of financial statements. In addition, during the audit of the financial economic activity organizations are identified financial risks(tax, legal, administrative, economic) and recommendations are issued to reduce them.
The strategic task of conducting an audit is to analyze the profitability and performance of the company in the light of its main, financial and investment activity. This task is achieved through a detailed analysis of the information that is presented in the organization's financial statements.
General audit financial sphere activity is carried out either at the initiative of the owner of the company, or for the purpose of an annual audit of the organization's accounts, the need for which is enshrined in law.
Who is this service for?
Financial audit services are primarily needed by managers of enterprises and organizations that seek to objectively evaluate the performance of their financial structures.
Auditing financial condition will give an independent opinion on the solvency and profitability of the company, the turnover of its capital, etc. Based on the results of the audit, the manager will be able to receive a full report on all the factors of interest to him. In addition, the audit report must contain recommendations for eliminating the identified shortcomings and optimizing financial activities organizations.
According to experts, an independent financial audit is a great opportunity to take an objective look at the company's activities. The firm-auditor is designed to help the owner of the enterprise or others interested persons unbiased assessment of the overall financial efficiency business. In this case this species audit is the main tool and an integral element of the overall financial analysis.
In what cases will a financial audit be not only useful, but also necessary?
- Such independent reviews should be carried out periodically to provide a superficial assessment of competence and performance. staff accountants cutaway proper management accounting.
- A financial audit of a company is carried out in the event of a change in the financial director, chief accountant or director of the enterprise.
- An audit of the financial condition of the company is performed to check the economic statements before submitting them to government bodies and statistics department.
What does a financial audit include?
- a comprehensive assessment of the financial condition of the enterprise;
- studying the effectiveness of the company, as well as financial results its activities;
- detailed analysis of the used financial and economic strategies;
- study of stability, solvency and liquidity of the enterprise;
- assessment of the prospects for increasing business activity, as well as the efficiency of the economic activity of the organization;
- recommendations for optimization financial strategy for a specific enterprise.
What should a firm that has committed itself to conducting a financial audit do?
- conduct a complete study of the structure of assets and liabilities of the audited company, income and expenses for each type and separately for each type of activity;
- consider financial ratios, the basis of valuation and the recognition of liabilities and assets,
- study the influence of individual factors accounting policy, including conditional values and estimates;
- identify and comment on the elements that underpin the company's reported business results for last years and have a significant impact on its financial results;
- explore the nature of the movement financial resources recently, as well as those factors that have a significant impact on it;
- give comments on the forecasts of the company's management regarding the development prospects commercial activities enterprises;
- give Special attention correlation of these forecasts with the current sales volume and the general financial condition of the company.
What are the main numerical indicators that play an important role in the course of a financial audit?
- Net income and net assets
- Turnover and profitability of the company
- Accounting for expenses and income, as well as the reliability of explanations to them
- All fixed assets of the enterprise, material and commodity stocks
- Accounts receivable and financial investments of the enterprise
- The presence of accounts payable on loans, credits or settlements with the company's suppliers
- Unrecorded liabilities
- The correctness of the organization's balance sheet
- Transactions with related parties
- Timeliness and reliability of the inventory of assets and liabilities of the enterprise, etc.
Which organizations require periodic mandatory independent audits?
Subject to mandatory financial audit:
- Enterprises that are built according to the organizational and legal form of an open joint stock company
- Enterprises that conduct credit or insurance activities
- Mutual insurance companies
- Commodity or stock exchanges
- Investment public off-budget funds
- Funds, source of formation financial base which are voluntary contributions of legal entities and individuals
- Organizations that are unitary state or municipal enterprises whose activities are based on the right of economic management
- Enterprises in respect of which periodic mandatory financial audit and reporting to regulatory authorities are provided for by law
- Companies that issue valuable papers
- Organizations that privatize communal or state property
What gives an independent audit of the company's financial activities?
Based on the results of the financial audit, the customer is provided with:
- The auditor's report, which contains officially confirmed data on the reliability of the financial or financial statements audited company. In addition, the auditor's report should include a reliable analysis of the financial position and performance of the organization for the period under study.
- A written report that contains complete information about all violations and shortcomings found as a result of the financial audit. All found errors and violations must be classified in full accordance with the established rules of the current legislation. In addition to the list of deficiencies found, this document should also contain recommendations on how to eliminate the financial mistakes made.
- A separate document drawn up on the basis of the results of the financial audit should contain recommendations aimed at improving the financial condition of the enterprise, as well as improving the efficiency of the company's financial management system.
In the modern business world, the opinion of an independent auditor on the reliability of accounting and financial statements is the best confirmation of the reliability and integrity of the company. In addition, an audit report will be necessary to confirm the company's image and business reputation when concluding contracts and agreements with partners or various credit institutions.
Applying for a financial audit to our company, you guarantee yourself the services of top-class specialists, a quick and professional audit, as well as the most complete and objective information in the final report.
An audit of the financial condition begins with determining the solvency of the enterprise. A solvent company is one whose current assets (reserves, cash, receivables and other assets) is greater than or equal to its external debt (liabilities). For example, let's define the current assets of a small private enterprise, "Fregat" thousand rubles.
The external debt of the enterprise is determined according to the data of sections II and III of the liabilities side of the balance sheet. It includes short, medium and long-term loans as well as accounts payable. In our example, it is 364 thousand rubles at the beginning of the year. (170 + 194), at the end of the year - 237 thousand rubles. (94 + 143).
Comparing current assets with external liabilities, the auditor concludes that the company is solvent, as for the past and reporting years current assets were greater than liabilities. However, it must be taken into account that the presence of stocks at the enterprise (especially state-owned) does not determine the real solvency, because in the conditions market economy stocks of work in progress, finished products and other inventory items in case of bankruptcy of the enterprise may not be sold for repayment external debt(some of them are illiquid, and on the balance sheet they are listed as reserves).
Marketable assets include cash and receivables and, to a certain extent (except for surpluses and stale inventories), inventories. Therefore, it is necessary to make an updated calculation of solvency, i.e. to determine the correspondence of fast-moving assets to external debt. Let's assume that in the production stocks no surplus and unnecessary materials. Then the fast-moving assets will amount to last year 759 thousand rubles [(650 - 85) + 194], and for the reporting - 1115 thousand rubles. [(720 - 115) + 510]. Comparison with external debt 479 thousand rubles. and 394 thousand rubles. indicates that the assets exceed the debt, and this characterizes the company as solvent.
The auditor establishes an increase or decrease in the level of solvency of the enterprise by changing the indicator of working capital (working capital), which he defines as the difference between all current assets (in the above example, at the beginning of the year, 1249 thousand rubles, at the end of the year - 1475 thousand rubles) and short-term debt, respectively, 479 thousand rubles. and 394 thousand rubles. The comparison shows an increase in the company's working capital. If at the beginning of the year it was 766 thousand rubles. (1247 - 479), then at the end of the year - 1081 thousand rubles. (1475 - 394), i.e. increased by 513 thousand rubles. (1081 - 768).
Application of new forms of labor organization, restructuring organizational structure management of the economy at enterprises led to the emergence of joint-stock, small, rental and other forms of management. Here the audit has some peculiarities. For example, at state enterprises, the statutory fund is a centralized source of financing intended for the formation of fixed assets and, to a certain extent, working capital. At joint-stock enterprises, the authorized capital reflects the share capital, at small enterprises - deposits, shares, etc., at rental enterprises - the residual value of fixed assets leased. This significantly affects the formation of working capital. On the state enterprise working capital are defined as: the difference between the authorized capital and fixed assets, in joint-stock and other enterprises, working capital is the difference between current assets (sections II and III of the asset balance sheet) and external liabilities.
Working capital consists of those types of property that are completely located in the enterprise during one financial year and carry out a full turnover or several turnovers. The sources of its formation are: increase net income, long-term obligations, share capital, etc. It should be borne in mind that the most reliable partner is an enterprise with big size working capital, as it can mark on its obligations, increase the scale of its activities. The benchmark for optimizing the size of working capital is its amount, which is equal to half of short-term liabilities. Attraction of borrowed funds for the implementation of economic activities of the enterprise may have different efficiency, which depends on the rational formation of the structure of sources of funds used.
Market economic conditions force enterprises to urgently pay off short-term debt at any time. The ability of an enterprise to pay off term liabilities is determined by an indicator that characterizes the ratio of working capital to short-term liabilities. This ratio must be equal to one. Both low and high ratios are unfavorable. In the above example, at the beginning of the year the ratio is 1.6 (768: 479) and at the end of the year - 2.74 (1081: 394), which indicates the ability of the audited enterprise to fulfill all external obligations. However, the auditor should take into account that design factor significantly more than one, which indicates the irrational formation of finances at the enterprise. This position should confirm the overall liquidity.
Liquidity is the ability of working capital to turn into cash, necessary for normal financial and economic activity. Auditors present their opinions to banks, suppliers, shareholders and other customers. Liquidity is determined by the ratio of all current assets to short-term liabilities (the latter are taken as one). According to the balance sheet under consideration, total liquidity can be presented at the beginning of the year as a ratio of 2.61 (1249: 479), for reporting period 3.74 (1475:394). The presented ratios give grounds for the auditor to conclude that the formation of the company's finances is irrational. It should be noted that when the ratio of current assets to short-term debt is less than one, this means that there is nothing to pay for external obligations. In cases where current assets are equal to short-term liabilities, i.e. 1:1 ratio, the entrepreneur does not have a free choice of solution. If the ratio is high, as in the above example, indicating a significant excess of current assets over debt, the company has a large amount free funds, uses expensive assets, i.e. profit from current assets is higher interest rates per borrowed funds.
The rational (optimal) option for the formation of the enterprise's finances is considered to be the one when fixed assets are acquired at the expense of the enterprise's free funds, current assets - by 1/4 through long-term loans, by 3/4 - through short term loans. An entrepreneur will work better if there is less own and more borrowed capital. Market relations are formed according to this principle. With a small equity capital, you can get more profit with rational management.
The auditor determines the liquidity of the enterprise based on the total amount of current assets. However, extraordinary circumstances can also affect the liquidity of an enterprise. In such cases, the auditor must calculate the liquidity ratio by maturity, which will determine whether the company will be able to return short-term debts. In this case, the ratio of fast-moving assets of cash, receivables and short-term liabilities is used. At the beginning of the year, this ratio is 0.38 (194: 479), i.e. the company was unable to repay the obligations urgently. A different situation developed at the enterprise at the end of the year, the ratio between assets and debt was 1.29 (510: 394).
Thus, the company is liquid, as cash and receivables exceed short-term liabilities. The rational formation of sources of funds by the auditor is determined by their structure. The auditor should pay the main attention to own means (own capital). On the balance sheet, equity (funds) consists of the total amount of sources of funds at the beginning of the year 52% [(3695: 7084) - 10], at the end of the year 51% [(3574: 6987) - 10], i.e. it decreased by 1%, but ensures its dominant position in the right to property.
The assessment of the structure of sources of funds, which the auditor has to give to banks, creditors, concerns a change in the share own funds in the total amount of sources of funds in terms of financial risk when concluding agreements, contracts. The risk increases when the share of own funds (capital) decreases.
Intra-production assessment of the change in the share of own funds (capital) is guided by the need to reduce or increase long- or short-term loans. share external loans, loans and accounts payable in general sources of funds depends on the ratio of interest rates for loans and dividend rates. If the interest rates for a loan are lower than the rates for dividends, then it is rational to increase the attraction of borrowed funds (short- and long-term loans). In the opposite situation, it is advisable to use own funds (own capital). Naturally, the structure of the sources of funds will depend on these circumstances. Ratio equity to attracted (alien), as a rule, should be 1:2. The auditor, after studying the structure of the sources of funds of the enterprise, provides information to banks, creditors on the expansion or curtailment of the enterprise's activities. A decrease in short-term loans and an increase in equity may be evidence of the winding down of an enterprise. However, it is impossible to come to such a conclusion at the same time, since part of these funds may be under the influence of other factors - interest rates for loans and dividends. The auditor's conclusion about the expansion or curtailment of the enterprise's activities can be retained earnings(in the balance sheet, the difference between the amount of balance sheet profit and the use of profit is section 1 of the asset and liability balance). At the beginning of the year it is 80 thousand rubles, at the end of the year - 10 thousand rubles. These data do not indicate the expansion of the company's activities.
The structure of the company's own capital according to the balance sheet is as follows:
It must be taken into account that in case of excess of interest for Bank loan average profit per 1 rub. current assets, it is more profitable for the company to increase its own capital. Therefore, the ratio of equity to borrowed capital is calculated, which is called the funding ratio.
The higher this ratio, the more reliable financing is for banks and lenders. In our example, at the beginning of the year it was 10.41 [(3780 + 8) : (170 + 194)], at the end of the year it was 15.03 [(3560 + 1): (94 + 143)].
As already noted, the optimal structure of finance is considered to be their formation at the expense of own funds only in terms of fixed capital (fixed assets). For this purpose, the investment indicator (the ratio of own funds to fixed capital) is calculated. At the beginning of the year it is 1.34 [(3780 + 8): (4950 - 2130)] and at the end of the year it is 1.44 [(3560 + 1): (4745 - 2280)]. It is considered optimal if own funds cover the entire fixed capital and part of working capital. The enterprise will be viable if it returns all borrowed funds on time.
The auditor determines the ability of the enterprise to fulfill its obligations by analyzing the structure of finances. From the above data, it can be seen that equity not only covers the fixed capital, but also used to form working capital, which indicates an irrational structure of finance. Long-term assets must be funded by long-term capital, not necessarily equity. It is considered rational when the fixed capital is at least 50% financed from equity and 50% from long-term loans. For banks and creditors, this distribution of capital is positive, since there is little risk of bankruptcy if the company has a large equity capital. For an enterprise, this means using its own finances, which it is advisable to invest in the expansion of its own production or invest in the purchase of securities, provide loans to other enterprises, etc. In this case, the alienation of equity capital must be replenished with borrowed funds. The definition of financial strategy is associated with the calculation of the effectiveness of the listed activities, which must be performed by auditors.
Accounts receivable and inventories are used in the calculation of solvency indicators, liquidity of working capital (funds). Depending on how quickly they turn into cash, the financial condition of the enterprise and its solvency are determined. For this purpose, the turnover of accounts receivable is determined, which is calculated as the ratio of sales proceeds to the amount of debt. Thus, during the reporting year, accounts receivable were in circulation 7.5 times. The higher this indicator, the faster the receivables turn into cash.
The auditor should especially carefully examine the organization of settlements with buyers, since the volume of sales of products, the state of receivables, and cash depend on this.
There are certain principles of relationships with customers (buyers and suppliers) that can be stated in the following way: sell for cash, buy on credit; lend the buyer for a shorter period than you receive a loan from the supplier, upon agreement, determine and verify the solvency of the concluded agreement.
Replenishment of cash at the enterprise depends on the turnover of inventories, which is calculated as the ratio of cost products sold to average stocks. The higher the turnover rate, the faster inventory turns into cash. The auditor should make such calculation in dynamics for several reporting periods.
For the purpose of the normal implementation of production and marketing of products, stocks must be optimal. The presence of smaller, but more mobile inventory means that a smaller amount of the enterprise's cash is in inventory. The presence of large stocks indicates a decrease in the activity of the enterprise regarding the production and sale of products.
Thus, the auditor, when checking the financial condition of the enterprise, examines not only the actual stability, solvency and liquidity of the enterprise, but also the prospect of increasing business activity and economic efficiency.
Introduction
2. Audit and analysis of the financial condition of the enterprise on the example of LLP "prima"
2.3 Analysis of solvency and financial stability enterprises LLP "Prima
Conclusion
List of sources used
Annex A - Main indicators financial and economic activities of Prima LLP for 2007-2008
Annex B - Contract for the provision audit services
Appendix B - Auditor's report
Introduction
Formation audit activity associated with the formation of market relations, privatization state property, reforming and developing various forms of ownership, including private ownership, granting independence in entrepreneurial activity business entities. In this regard, there is a growing need for the reliability of accounting and reporting data for a wide range of external and internal consumers of information on the business activity of enterprises in order to prevent risk when investing their capital and control their effective use.
Kazakhstan's transition to market relations predetermines the need to create economic institutions that regulate the relationship between different business entities. The audit institution can take the leading place in this process. This is especially important for Agriculture where fundamental changes took place.
In this regard, the audit at enterprises should be organized and carried out according to such methodological approaches that would ensure the reliability of checks of compliance with the reflection in accounting registers and reporting of fixed assets, fuels and lubricants, spare parts, raw materials and other materials available on the farm for the period of verification, as well as the reliability of product costing and evaluation during processing and sale; determination of financial results; drawing up accurate, complete and timely reporting in the accounting and reporting of economic facts, obtain evidence to confirm it and convey this truth through an audit conclusion to information users.
In the situation that has developed at enterprises and the Kazakh economy as a whole, the most pressing issue is the audit of the financial condition of the enterprise. Since this analysis can reveal weak and strengths enterprises and prompt the choice of adopting the most rational management decision. This will help save the enterprise from bankruptcy, increase the independence, liquidity of the enterprise, etc. depending on the current economic situation.
aim term paper is the study of methods of auditing the financial condition of the enterprise.
The objectives of the course work are:
Consider the theoretical foundations and the regulatory framework for the regulation of audit activities;
Consider the methodology for auditing the financial condition of an enterprise;
The subject of the course work is the content and basic procedures for auditing the financial condition of the enterprise, the object of research is the financial condition of Prima LLP.
1. Theoretical aspects audit of the financial condition of the enterprise
1.1 Theoretical basis and legal framework regulation of audit activity
According to the Law of Kazakhstan "On Auditing Activities" dated November 20, 1998, an audit is an audit of public financial statements, accounting, primary documents and other information regarding the financial and economic activities of business entities in order to determine the reliability of their reporting, accounting, its completeness and compliance with current legislation and established standards.
The concept of audit activity is broader and provides practical implementation, both audit and other audit services in the form of related expertise, consultations on accounting, reporting, taxation, analysis of financial and economic activities and other types of economic and legal support for entrepreneurial activities of individuals and legal entities.
The subject of audit activity is the process of expanded reproduction of a socially necessary product and compliance with its economic and legal regulation in a market economy.
The objects of the audit are accounting, reporting reliability, financial stability, solvency, enterprise management system, quality of work of economic and technical services, taxation, planning, regulation, stimulation, internal control, organization and technology of production, business processes, design and estimate documentation, executive discipline, etc.
The International Federation of Accountants, together with the International Committee on Auditing Practices, has developed auditing standards in the amount of 29 basic standards and 4 related works.
The Audit Chamber of Kazakhstan (AIC) is an independent independent body, the purpose of which is to promote the development, improvement and unification of the audit business in the country.
The powers of the Audit Chamber of Kazakhstan are determined by the Law of Kazakhstan "On Auditing" and the Charter of the AIC adopted on June 1-2, October 1993.
In order to regulate the rules and procedures for conducting audits and performing audit services, the AIC has developed national standards (norms) for auditing. They are based on the legislation of Kazakhstan on audit activity and international audit standards.
Auditing standards formulate uniform basic requirements that define the regulatory requirements for the quality and reliability of the audit and provide a certain level of assurance of the results of the audit if they are observed.
The meaning of the standards is that they:
Ensure the high quality of the audit;
Assist in the introduction of new scientific achievements into audit practice;
Help users understand the audit process;
Create a public image of the profession;
Provide links between individual elements of the audit process.
1.2 Audit of the financial and property condition
An audit of the financial and property condition consists in overall assessment changes financial indicators for the reporting period by horizontal and vertical analysis of the balance sheet.
At the same time, indicators of the dynamics of the balance or horizontal analysis allows you to set their absolute deviation and growth rates at the end of the year compared to the beginning.
In turn, indicators of the structure of the balance sheet or vertical analysis allows you to determine the proportion of items and sections of the balance sheet in its overall total.
The analysis of the property state of the enterprise is characterized by such coefficients as: the coefficient of depreciation, renewal, growth and disposal.
The depreciation coefficient characterizes a particle of the value of fixed assets, which is written off as production costs in previous periods. The upward trend indicates an increase in the depreciation of fixed assets and is a negative factor.
The coefficient of renewal of fixed assets characterizes the intensity of the introduction of new fixed assets into the enterprise. A decrease in the indicator indicates that the enterprise has begun to introduce less new fixed assets into production (negative trend). If the update rate increases in dynamics, then this is a positive trend.
The retirement rate shows the intensity of the departure of fixed assets, that is, the degree of departure of these fixed assets, which are either obsolete or worn out and unsuitable for further use.
It is also important that the dropout rate be less than the renewal rate. This situation is indicative of a normal investment policy at the enterprise.
The growth rate of fixed assets characterizes the level of increase in fixed assets. An increase in the indicator indicates a positive trend.
1.3 Audit of solvency and financial stability
Solvency is the ability of an enterprise to certain period time to fulfill obligations to creditors that arise as a result of their financial and economic activities.
Solvency reflects the company's ability to repay short-term Current responsibility with its marketable assets.
The means of payment must be greater than or equal to current liabilities, that is, if the solvency ratio is greater than or equal to 1, then the company is solvent.
Analysis financial ratios is based on the calculation of the ratios of various absolute indicators of the financial activity of the enterprise among themselves.
The most widespread are the following groups of financial ratios.
Factors for assessing the financial stability of the enterprise. The coefficients of this group make it possible to identify the level of financial risk associated with the structure of the sources of formation of the enterprise's capital, and, accordingly, the degree of its financial stability in the process of future development. To conduct such an assessment in the process of financial analysis, the following main indicators are used:
a) Coefficient of maneuverability (KA). It shows to what extent the volume of assets used by the enterprise is formed at the expense of equity capital and to what extent it is independent of external sources financing. The calculation of this indicator is carried out according to the following formula:
KA=SK/K=1P/B,
where SC is the amount of the enterprise's own capital on a certain date, K is the total amount of the enterprise's capital on a certain date. The higher the value of this ratio, the more financially stable, stable and more independent of external creditors the enterprise. The critical value of the financial stability ratio is 0.5.
b) Financial risk ratio (CF). It characterizes the amount of borrowed funds per unit of equity capital, i.e. the degree of dependence of the enterprise on external sources of financing. The following formula is used to calculate this indicator:
KF \u003d ZK / SK \u003d 2P + ZP + 4P + 5P / 1P,
This ratio gives the most complete assessment of financial stability. The calculation of the indicator in dynamics indicates an increase in the dependence of the enterprise on external investors and creditors, i.e., a decrease in financial stability and vice versa. The optimal value of this coefficient is less than 0.5, the critical value is 1.
c) The coefficient of maneuverability of equity capital (KM). The ratio should be high enough to allow flexibility in the use of the enterprise's own funds:
KM=SOS/SK=1P-1A/1P
To determine the optimal value of the maneuverability coefficient, it is necessary to compare this indicator for a particular enterprise with the average indicator for the industry or competitors.
d) Coefficient of long-term financial independence(KDN). It shows the extent to which the total volume of assets used is formed at the expense of the company's own and long-term borrowed capital, i.e. characterizes the degree of its independence from short-term borrowed sources of financing. The calculation of this indicator is carried out according to the formula: KDN \u003d SC + ZKd / A \u003d 1P + ZP / B
1.4 Analysis of balance sheet liquidity
The liquidity of assets is the ability of individual elements of assets to be transformed into cash. For evaluation, a form of financial reporting is involved - a balance sheet, where asset items are placed according to the principle of increasing liquidity from top to bottom.
Liquidity assessment coefficients characterize the ability of an enterprise to pay its current financial obligations in a timely manner at the expense of current assets different levels liquidity. Carrying out such an assessment requires a preliminary grouping of current assets of the enterprise according to the level of liquidity.
The degree of liquidity is the rate at which an enterprise's assets are converted into cash.
The most liquid assets - include all the company's cash and current financial investments (A1).
Fast-moving assets. Assets for circulation of which in monetary form longer time required: finished products, goods, receivables, bills (A2).
Slow selling assets. A much longer time will be needed to turn inventories and costs in work in progress into finished goods, and then into cash. In addition, this group includes deferred expenses, as well as current assets that are not included in the first two groups (AZ).
hard-to-sell assets. Non-current assets of the enterprise are included, the value of which is reflected in the first section of the asset balance (A4).
Liabilities are grouped by degree of maturity:
Most urgent obligations. It is customary to refer to them accounts payable for purchased goods, works, services (P1).
short-term liabilities. Short-term borrowings, current settlement obligations and other current liabilities (P2).
Long-term liabilities. Represented by long-term liabilities of the enterprise, reflected in section 3 of the liabilities side of the balance sheet, as well as articles 2 and 5 sections of the liabilities side of the balance sheet, not assigned to the second group (P3).
Permanent (sustainable) liabilities are articles 1 of the liability section of the balance sheet.
To assess liquidity in the process of financial analysis, the following key indicators are used:
a) Coefficient absolute liquidity(CAP). It shows to what extent all current financial obligations enterprises are provided with ready-made means of payment available to it on a certain date. In countries transition economy his optimal value is recognized at the level of 0.2-0.35. A value above 0.35 is not always required, since an excess of funds indicates an inefficient use of them. The calculation of this coefficient is carried out according to the formula:
KAP=L1/P1 +P2
b) Current liquidity ratio shows the extent to which current assets are sufficient to meet current liabilities. The logic behind the calculation of this ratio is that current assets must be fully converted to cash within one year, and current liabilities must also be paid within a year.
According to generally accepted standards, it is believed that this coefficient should be in the range from one to two. The lower limit is due to the fact that working capital must be at least enough to pay off short-term liabilities, otherwise the company is at risk of bankruptcy. An excess of short-term funds over liabilities by more than two (three) times is also considered undesirable, since it may indicate a violation of the capital structure. When analyzing the coefficient, special attention should be paid to its dynamics.
Using the classification of assets and liabilities above, the formula for determining the total liquidity ratio can be represented as follows:
KTL \u003d A1 + A2 + AZ / P1 + P2
c) coefficient urgent liquidity is considered a tougher test for liquidity, since its calculation does not take into account the least liquid part of current assets - slow-moving assets (LZ). There are two main reasons why slow-moving assets are not included in this ratio:
The net realizable value of such assets in a forced sale is much less than the value at which neither assets are reflected in the balance sheet;
If an enterprise sells its inventories (namely, they often dominate this group of assets), then the question arises of how it will continue its activities. This coefficient is calculated according to the form:
KSL=A1+A2/P1+P2
It is desirable that this coefficient be about 1.5. However, in our conditions, its value equal to 0.7-0.8 is recognized as sufficient.
2. Audit and analysis of the financial condition of the enterprise on the example of PRIMA LLP
2.1 Brief description of the enterprise
LLP "Prima" was registered in the Department of Justice of Pavlodar region on December 05, 2001, certificate No. 9919-1945 LLP. The type of property is private.
Prima LLP is legal entity and is guided in its activities by the legislation of the Republic of Kazakhstan, as well as the provisions of the Charter.
The main activity is flour-grinding and processing, purchase, storage, processing and sale of agricultural products.
The partnership has the right to carry out other activities:
Bakery production and sale of bread and cotton products;
Wholesale of consumer goods;
Purchase and sale of fuels and lubricants and other oil products;
Cultivation and production of grain, grass and other crops, their processing and sale;
Creation of a sales network in the form of stores;
Technical, organizational, transport, service and operational services, including the purchase and supply, sale, installation, installation, development, production, implementation, operation, repair, maintenance of machines, mechanisms, instruments, equipment, software tools, systems, incl. security and other equipment;
Organization of car parks and Maintenance vehicles;
Representation, information and advisory services;
Other services that are profitable or necessary for the activities of the Partnership that do not contradict the current legislation of the Republic of Kazakhstan.
Other activities are not prohibited by law.
Prima LLP has a current account:
- No. 023467065 in PF JSC " National Bank» BIC 193201601;
currency accounts:
- No. 201070258 in the Pension Fund of OJSC Halyk Bank USD;
- No. 358160736 in the Pension Fund of Halyk Bank OJSC KZ;
Is registered as a taxpayer in budgetary and non-budgetary funds in Pavlodar.
The management bodies of the LLP are: the director and his deputies.
The person authorized to perform managerial functions is: director.
The person authorized to maintain accounting records is: Chief Accountant who heads the accounting department.
According to the law "On Accounting" and SBU-1, the manager is responsible for:
Selection of a specialist for the position of chief accountant;
Organization of the system of accounting, reporting, tax accounting, as well as the adoption of the Accounting Policy.
2.2 Analysis of the financial and property condition of Prima LLP
Table 1 Analysis of the composition and structure of assets for Prima LLP for 2008
| Asset items | At the beginning of the year | At the end of the year | Change +- | % increase | |||
| Amount, thousand tons | Amount, thousand tons | Amount, thousand tons | |||||
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| I. Current assets: | |||||||
| 1.TMZ | 21687,2 | 4,4 | 16445,3 | 3 | -5241,9 | -1,4 | -24,2 |
| 2.Short-term accounts receivable | 7180,2 | 1,4 | 48190,2 | 8,8 | +41010 | 7,4 | +571,2 |
| 3.Cash | 1348,3 | 0,3 | 42661,2 | 7,8 | +41312,9 | +7,5 | +3064,1 |
| Total for Section I | 30215,7 | 6,1 | 107296,7 | 19,6 | +77081 | +13,5 | +255,1 |
| II.Long-term assets: | |||||||
| 1. Depreciation of intangible assets | 10,5 | - | 19,6 | - | +9,1 | - | +86,6 |
| 2. Residual value of intangible assets | 59,9 | 0,1 | 50,8 | 0,1 | -9,1 | 0 | -15,2 |
| 3.OS wear | 25380,0 | - | 23341,7 | - | -2038,3 | - | -8 |
| 4. Residual value of OS | 449511,2 | 90,6 | 440003,1 | 80,2 | -9508,1 | -10,4 | -2,1 |
| 5.Unfinished cap. construction | 16528,3 | 3,3 | 247,6 | 0,1 | -16280,7 | -3,2 | -98,5 |
| Total for Section II | 466099,4 | 93,9 | 440301,5 | 80,4 | -25797,9 | -13,5 | -5,5 |
| Balance | 496315,1 | 100 | 547598,2 | 100 | +51283,1 | - | +10,3 |
| Assets at the beginning of the year | ||||||
| Current (6.1%): | Long-term (93.9%): | |||||
| Assets at the end of the year | ||||||
| Current (19.6%): | Long-term (80.4%): |
|||||
| Name of indicator | Calculation formula |
Basic |
Reporting |
Change |
||
| 1. Factor of the real cost of fixed assets | Kros \u003d Oso / WB \u003d\u003e 0.5 |
|||||
| 2. Wear factor | Ki=NI/OSP<=0,5 | 0,05 | 0,05 | 0 | ||
| 3. Return on assets | Fo=Dr/OSo | 0,2 | 0,3 | +0,1 | ||
| 4. Capital intensity | Fe=OCo/Dr | 4,5 | 3,9 | -0,6 | ||
| 5. Mobility factor TA | (DS+CFI)/TA*100% | 4,5 | 39,8 | +35,3 | ||
| 6. Ratio ratio | total/total | 0,06 | 0,2 | +0,14 | ||
Conclusion: An analysis of the property status of Prima LLP showed that the value of property by the end of the year increased by 51,283.1 thousand tenge, or by 10.3%, which indicates the positive work of the enterprise. The increase in property was caused primarily by a significant increase in current assets by 13.5%, which amounted to 77,081 thousand tenge, but it should be noted that the value of long-term assets decreased significantly by the same 13.5%, which amounted to 25,797, 9 thousand tenge.
Analysis of placement efficiency showed that at the beginning of the year, long-term assets exceeded current assets by 0.06 times, and at the end of the year by 0.2 times, which does not exceed the regulatory limits at all. This is explained by the fact that the share of long-term assets in the property of the enterprise, both at the beginning and at the end of the year, was the largest share - 93.9% and 80.4%, respectively, and current assets were only 6.1% and 19.6% respectively.
In the composition of long-term assets at the end of the year, there was a decrease in all items in terms of amount, especially in capital construction in progress, which confirms the company's policy to expand its production capacity. However, the decrease in depreciation of fixed assets suggests that the company devoted all its efforts to expanding production and, with a shortage of funds, most likely sold its fixed assets to complete the construction project. Evaluation of the efficiency of using fixed assets showed a rather low level of capital productivity, namely, each tenge invested in fixed assets gives a return on the form of manufactured products in the amount of 0.2 tenge at the beginning of the year and 0.3 tenge at the end of the year. those. for the production of products for 1 tenge, it is required to invest in fixed assets 4.5 and 3.9 tenge of assets. The conduct of such a policy in the future can lead the company to bankruptcy. This is confirmed by the analysis of current assets. The current assets of a solvent enterprise usually occupy the largest share in the assets of the enterprise, but in this situation this is not the case. Current assets, both at the beginning of the year and at the end, occupy the smallest share in the assets of the enterprise, this alone already indicates that the enterprise does not rationally allocate assets between current and non-current assets. Accounts receivable increased sharply, the growth rate amounted to 571.2%, or in the amount of 41,010 thousand tenge. on the one hand, it indicates a delay by the buyers of the company's products of their payments, on the other hand, it indicates the upcoming funds, and if the company has solvent debtors, then financial well-being is guaranteed.
The share of TMZ sharply decreased by 5241.9 thousand tenge, the growth rate decreased by -24.2%, which may indicate problems with the supply of raw materials, or the company's intention to reduce and stop its activities.
The share of funds from 0.3% to 7.8% and the growth rate was 3064.1%. On the one hand, it reflects an increase in the solvency of the enterprise, and on the other hand, it indicates the formation of free cash unused in circulation, which can lead to their depreciation in conditions of high inflation. An increase in cash contributes to an increase in the mobility ratio of current assets, i.e. assets really ready for payment of urgent payments. The calculation of this coefficient showed that the changes that occurred in the composition of T.A. allowed to significantly increase the mobile part of assets by 35.3%.
Table 2 Analysis of the composition and structure of the sources of formation of economic assets for Prima LLP for 2008.
| Liabilities articles | At the beginning of the year | At the end of the year | Change +- | % increase | |||
| Amount, thousand tons | Amount, thousand tons | Amount, thousand tons | |||||
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| III.Current liabilities | |||||||
| 1. Accounts payable | 19062,6 | 3,8 | 18456,9 | 3,4 | -605,7 | 0,4 | -3,2 |
| 2. Tax debt | 4885,1 | 1 | 1892,8 | 0,3 | -2992,3 | -0,7 | -61,3 |
| 3. Accrued expenses | 38337,2 | 7,7 | 27779,4 | 5,1 | -10557,8 | -2,6 | -27,5 |
| Total current liabilities | 62284,9 | 12,5 | 48129,1 | 8,8 | -14155,8 | -3,7 | -22,7 |
| IV.Long-term liabilities | |||||||
| 1.Long-term loans | 224287,5 | 45,2 | 302466,5 | 55,2 | +78179 | 10 | 34,9 |
| Total non-current liabilities | 224287,5 | 45,2 | 302466,5 | 55,2 | +78179 | 10 | 34,9 |
| V. Equity | |||||||
| 1. Authorized capital | 970 | 0,2 | 970 | 0,2 | 0 | 0 | 0 |
| 2.reserve capital | 485 | 0,1 | 485 | 0,1 | 0 | 0 | 0 |
| 3. Retained earnings (loss) | 208287,7 | 42 | 195547,6 | 35,7 | -12740,1 | -6,3 | -6,1 |
| Total equity | 209742,7 | 42,3 | 197002,6 | 36 | -12740,1 | -6,3 | -6,1 |
| Balance | 496315,1 | 100 | 547598,2 | 100 | +51283,1 | - | +10,3 |
| Autonomy coefficient | Financial dependency ratio | Coefficient of the ratio of SC and SC |
| SC/WB=>0.5 | SC/WB<=0,5 | ZK/SK<=1 |
Kan=209742.7/496315=0.4 KaK=197002.6/547598.2=0.4 |
KzN=286572.4/496315.1=0.6 KzK=350595.6/547598.2=0.6 |
Kzk/skN=286572.4/209742.7=1.4 Kzk/skK=350595.6/197002.6=1.8 Kzk / sk \u003d 1.8-1.4 \u003d + 0.4 |
Conclusion: the receipt, acquisition and creation of the property of an enterprise can be carried out at the expense of its own and borrowed capital, the ratio of which determines its financial stability. The capital of the enterprise according to ownership is grouped into 2 groups:
Equity capital (SK);
Borrowed capital (LC): long-term liabilities and current liabilities.
An analysis of the sources of asset formation showed that their total value by the end of the year increased significantly by 10.3% or by 51,283.1 thousand tenge, which indicates that the enterprise by the end of the year has more funds allocated to finance and create property.
The increase in the total share of liabilities was caused primarily by a sharp increase in long-term borrowings by 34.9%, which in total amounted to 78,179 thousand tenge, but it should be noted that by the end of the year the value of current liabilities decreased by 22.7% or by the amount 14155.8 thousand tenge, which is generally assessed positively and means that the company has enough own working capital to finance economic activities.
There were also changes in equity capital at the end of the year, it decreased by 6.1% or by 12,740.1 thousand tenge. The decrease in the amount of equity capital was due to the decrease in the item “Retained income (loss)” by exactly these same 6.1% and 12,740.1 thousand tenge.
An analysis of the source structure showed that both at the beginning and at the end of the year the enterprise does not have financial autonomy, since the share of equity in the balance sheet totaled only 42.3% at the beginning of the year, and at the end of the year this figure decreased and amounted to 36% , this indicates that for every tenge of equity capital invested in the assets of the enterprise, it borrowed 1.4 borrowed funds at the beginning of the year, and 1.8 at the end of the year, and this indicates that the enterprise is becoming more dependent on its creditors.
2.3 Analysis of the solvency and financial stability of the enterprise Prima LLP
Table 3 Analysis of the current solvency of Prima LLP for 2008
Current solvency ratio:
Kt / s = amount of means of payment / amount of short-term current liabilities> 1.
Kt/sN=1348.3/62284.6=0.02
Kt/sK=42661.2/44824.6=0.95
Kt/s=0.95-0.02=+0.93
Conclusion: The solvency analysis showed that the company at the beginning of the year was absolutely not solvent, almost had no opportunity to pay its payments, except for 2% of payments, but at the end of the year this situation changed in a positive direction and the company can pay its payments by 93%.
The reasons for the insolvency of the enterprise may be different, such as for example:
Non-fulfillment of the plan for production and sale of products;
Lack of own funds for financing as a result of non-fulfillment of the income plan;
Growth in production costs;
High percentage of taxation;
Unjustified diversion of funds in accounts receivable;
Unjustified investment in production stocks in excess of the need for them.
2.4 Liquidity analysis of the balance sheet of Prima LLP
Table 4 Liquidity analysis of the balance sheet for Prima LLP for 2008
| Assets | Beginning of the year | The end of the year | Liabilities | Beginning of the year | The end of the year | Payment surplus-+; flaw | |
| early of the year | The end of the year | ||||||
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| A1 | 1348,3 | 42661,2 | P1 | 62284,9 | 48129,1 | -60936,6 | -5467,9 |
| A2 | P2 | 0 | 0 | +7180,2 | +48190,2 | ||
| A3 | 21687,2 | 16445,3 | P3 | 224287,5 | 302466,5 | -202600,3 | -286021,2 |
| A4 | 466099,4 | 440301,5 | P4 | 209742,7 | 197002,6 | +256356,7 | +243298,9 |
| total | 496315,1 | 547598,2 | total | 496315,1 | 547598,2 | 0 | 0 |
Balance liquidity equation
at the beginning of the year at the end of the year
A1< П1 А1 < П1
A2 > P2 A2 > P2
A3< П3 А3 < П3
A4 > P4 A4 > P4
The balance sheet liquidity equation for Prima LLP showed that at the beginning and at the end of the year, the company is not expected to receive funds to pay for the most urgent payments in the next three months, but, however, in the next 3 to 6 months, the company will be able to pay off the most urgent and short-term obligations, in the near future the company will not be able to pay off long-term obligations. Based on the fact that A1< П1, то в этом случае баланс имеет текущую ликвидность.
Analysis of the liquidity of the balance sheet showed that both at the beginning and at the end of the year the company does not have absolute liquidity, so in the next three months it will not be able to pay off the most difficult payments.
To establish whether the company has current solvency, you need to compare the total amount of A1 and A2 with the total amount of P1 and P2:
Current liquidity
at the beginning of the year at the end of the year
A1+A2=8528.5 A1+A2=90851.4
P1+P2=62284.9 P1+P2=48129.1
BUT<П=-53756,4 А>P=+42722.3
The amount of the most liquid and fast-selling assets at the beginning of the year amounted to 8528.5 thousand tenge due to which payments to be made in the amount of 7.3 times exceeding the amount of the fast-selling assets themselves. However, at the end of the year, this situation changed; In addition, it should be noted that the amount of assets over liabilities increased from -53756.4 to +42722.3 thousand tenge, thus, the above evidence allows us to recognize the company as solvent.
Table 5 Analysis of liquidity ratios for Prima LLP for 2008
Conclusion: Calculations of the absolute liquidity ratio showed that at the end of the year this indicator sharply exceeded the regulatory limits by 1.3 points and amounted to 2.3 points, which means that this moment the balance is absolutely liquid as it can immediately repay 230% of its current liabilities at the end of the year.
The quick liquidity ratio shows that an enterprise at the end of the year can pay its current liabilities in full by 100%, even remaining for the development of its enterprise.
The current liquidity ratio at the beginning of the year showed that current assets exceeded current liabilities by 1.6 times, and at the end of the year current assets exceeded current liabilities by 5.8 times, so the company has current liquidity.
At the beginning of the year, the overall liquidity ratio shows that, at the expense of all existing assets in the enterprise, it will not be able to repay all its obligations by 100%. However, at the end of the year this coefficient sharply increases by 0.5 points. Also, at the end of the year, all liquidity ratios increase, which indicates an increase in the degree of liquidity of the balance sheet.
Conclusion
The organization and methodology of an independent audit have not yet received adequate coverage in the educational and methodological literature, which creates significant difficulties both in the training of audit personnel and in audit activities. The resulting need for training study guide, which reflected the main issues of organizing audit activities, conducting audits and methods of auditing business objects.
Thus, we can conclude that today there is no unified methodology for assessing the financial condition of enterprises based on the forms annual accounts compiled in accordance with national accounting standards. In this regard, the resolution of controversial issues in the field of methodology of financial analysis and assessment of the financial condition will be relevant.
Summing up, it should be noted that for the normal functioning of the enterprise in their practice, they must use a variety of techniques and methods for conducting an audit. Thus, they will be able to avoid problems when checking the enterprise by control and audit services, reduce the number of errors in accounting and financial reporting, provide internal and external users truthful, complete and reliable information about the activities of the enterprise, while maintaining (or) giving it an impeccable reputation.
Analyzing the activities of the Prima LLP enterprise and taking into account regulatory framework audit activities in the Republic of Kazakhstan, it is necessary, in our opinion, to make the following proposals:
introduce the position of an internal auditor at the enterprise;
amend the accounting policy of the enterprise regarding the conduct of audits;
together with an external audit, conduct an audit at the enterprise with the involvement of its own (internal) auditors.
Subject to the above proposals, Prima LLP will be able to easily maintain accounting records and submit reports to regulatory authorities, show the best results of its activities to attract national and foreign investors.
During the crisis, many enterprises in the Kazakhstani market of goods and services simply disappear, as they could not cope with the inflation rate and, with many other factors, it should be noted that Prima LLP at the end of 2008 improved its main indicators, which means it is developing and strengthens its position among competitors.
Bibliography
1. Law of the Republic of Kazakhstan dated November 20, 1998 No. 304-I “On Auditing Activities” (with amendments and additions as of February 19, 2007)
2. Aitzhanova Zh.N. Accounting, reporting, audit of sustainable economic development- Almaty: Economics, 2002
3. Ablenov D.O. Fundamentals of Auditing - Almaty: Economics, 2003
4. Gracheva M.E. International Auditing Standards
5. Dyusembaev K.Sh. Audit and analysis of economic activities - Almaty, 2000
6. Zharylgasova B.T. Suglobov A.E. International Auditing Standards - M., 2005
7. Marenkov N.L. Audit and control - M., 2004
8. Mironova O.A., Azarskaya M.A. Audit: theory and methodology - M., 2005
9. Torshaeva Sh.M. Audit - Karaganda, 2002
10. Torshaeva Sh.M. Audit Theory - Karaganda, 2000
/ Auditor control of the results of the financial and economic activities of the enterprise and its financial condition / Audit of the financial condition of the enterprise
Page 1
An audit of the financial condition begins with determining the solvency of the enterprise. A solvent company is one in which the amount of current assets (stocks, cash, receivables and other assets) is greater than or equal to its external debt (liabilities).
Example.
Calculation of the current assets of the enterprise, thousand UAH.
The external debt of the enterprise is determined according to the data of sections II and III of the liabilities side of the balance sheet. It includes short, medium and long-term loans and all accounts payable. In our example, it is 3640 thousand UAH at the beginning of the year. (1700 + 1940), at the end of the year - 2370 thousand UAH. (940 + 1430).
Comparing current assets with external liabilities, we can conclude that the company is solvent, because for the past and reporting years, current assets were greater than liabilities. However, it should be borne in mind that the presence of stocks at an enterprise (especially state-owned ones) does not determine real solvency, since in a market economy, stocks of work in progress, finished products and other inventory items in the event of bankruptcy of an enterprise may not be sold to pay off external debts ( some of them are simply illiquid), but are on the balance sheet as reserves.
Marketable assets include cash and receivables and, to a certain extent (except for balances and stale goods), inventories. Therefore, it is necessary to draw up an updated calculation of solvency, i.e. determine the compliance of marketable assets with external debt. Assume that there are no surplus and unnecessary materials in the inventory. Then marketable assets for the last year will be
7590 thousand UAH [(6500 - 850) + 1940],
and for the reporting
UAH 11,150 thousand [(7200 - 1150) + 5100].
Comparison with external debt UAH 4,790 thousand. and 3940 thousand UAH. shows the excess of assets over debt, which characterizes the company as solvent.
An increase or decrease in the level of solvency of an enterprise by an audit is determined by a change in the indicator of working capital (working capital), which is defined as the difference between all current assets (in the above example, at the beginning of the year, 12,490 thousand hryvnias, at the end of the year - 14,750 thousand hryvnias. ) and short-term debts (4,790 thousand and 3,940 thousand UAH, respectively). The comparison shows the growth of the company's working capital. If at the beginning of the year it was UAH 7,680 thousand, then at the end of the year it was UAH 10,810 thousand, i.e. increased by UAH 3130 thousand. (10 810 - 7680).
The use of new forms of labor organization, the restructuring of the organizational structure of economic management at enterprises led to the emergence of joint-stock, small, rental and other forms of management. Thus, at state enterprises, the statutory fund is a centralized source of financing intended for the formation of basic and, to a certain extent, working capital. At joint-stock enterprises, the share capital is reflected in the authorized capital, at small enterprises - deposits, shares, etc., at leased enterprises - the residual value of fixed assets leased. This provision significantly affects the formation of working capital. At a state enterprise, working capital is defined as the difference between the authorized capital and fixed assets, at joint-stock and other enterprises, working capital is the difference between current assets (sections II and III of the asset balance sheet) and external liabilities.
The sources of working capital formation are an increase in net income, long-term liabilities, equity capital, etc. It must be borne in mind that an enterprise with a large amount of working capital is considered the most reliable partner, since it can meet its obligations and increase the scale of activities.
Financial audit is a comprehensive check of the economic and financial condition of the organization, verification of the reliability of information in the financial statements of the organization, as well as analysis and assessment of the prospects for its development, which can be carried out both by specialists of the organization itself (internal audit) and by third-party audit companies commissioned by management ( independent audit).
In practice, financial audit is often viewed as a very narrow concept, usually including the classic statutory audit of financial statements.
The main purpose of an independent audit is to assess the correctness of accounting in the audited company, as well as to verify the reliability of financial statements.
During the audit of the financial activities of the organization:
- financial risks (tax, legal, administrative, economic) are identified;
- recommendations are made to reduce them.
The task of conducting an audit is to analyze the profitability and efficiency of the main, financial and investment activities of the company. To accomplish this task, a detailed study, analysis and evaluation of the information presented in the financial statements of the organization is necessary.
Internal financial audit of the organization
In our country internal audit Financial reporting has so far received less attention than it deserves. Internal financial audit is a type of activity of an organization that, on the basis of internal documentation, controls the management and various areas financial activities of the company.
The internal financial audit is carried out by a special department that works as part of the audited company. Such a check is necessary for management to be able to study and analyze the real state of affairs in their organization. Based on the information obtained during the financial audit, management develops ways to improve the organization's performance. Activity internal auditors is of a consultative nature.
For an objective analysis of the financial and economic activities of the organization and obtaining an impartial report, it is better to use the services of third-party audit firms.
The significance of the audit report for the company
The best confirmation of the reliability and honesty of the company in the modern business world is the conclusion of an independent auditor on the reliability of financial and accounting statements. In addition, an audit report is necessary to confirm the company's image and business reputation when concluding contracts and agreements with partners or various credit institutions.
Auditor's report - a document intended for users of the accounting (financial) statements of the audited entities, which contains the expressed opinion of the audit organization, the individual auditor on the reliability of the accounting (financial) statements of the audited entity (Article 6 federal law“On audit activity” dated December 30, 2008 No. 307-FZ).
Based on the results of the audit report, the head of the organization decides on the need for specific actions. As a rule, after the measures taken tax authorities do not impose penalties for scheduled inspections. Thus, companies manage to avoid significant financial losses.
Who is authorized to audit financial statements
Audit services can be carried out:
- audit organizations - commercial legal entities;
- individual auditors -individual entrepreneurs with an auditor qualification certificate.
At the same time, in order to be audited, such companies and individual entrepreneurs must be members of one of the self-regulatory organizations auditors. Auditing services can be provided from the date of entering information about the relevant legal entity or individual entrepreneur into the register of auditors and audit organizations of the self-regulatory organization of auditors.
Auditing activities are carried out in accordance with international standards audit (ISA), which are mandatory for audit organizations, auditors, self-regulatory organizations of auditors and their employees.
Who is entitled to order a financial audit of an organization
The audit report is submitted by an audit organization, an individual auditor only to the person who has entered into an agreement for the provision of audit services - to the management (owners) of the company. Depending on the form of activity of the organization, these can be:
- participants of the meeting of shareholders;
- Board of Directors;
- members of a production cooperative;
- supervisory board;
- executive bodies.
An independent financial audit is necessary for the heads of organizations for an objective assessment of the effectiveness of financial activities and business.
If a company is subject to a mandatory audit of financial and accounting statements, it is its responsibility to obtain an audit opinion.
Criteria statutory audit financial statements are contained in Art. 5 of the Federal Law of December 30, 2008 No. 307-FZ "On Auditing".
In particular, organizations that require periodic mandatory financial audit:
- organizations that have the organizational and legal form of a joint-stock company;
- organizations that conduct credit or insurance activities;
- mutual insurance companies;
- commodity or stock exchanges;
- investment state off-budget funds;
- organizations in respect of which periodic mandatory financial audit and reporting to regulatory authorities are provided for by law;
- organizations that issue securities.
The need for a financial audit
In addition to the mandatory audit of financial statements, in practice there are often situations in which a financial audit of a company is desirable:
- to assess the competence and performance of in-house accountants in terms of proper bookkeeping;
- in case of change of financial director, chief accountant or director of the organization;
- to check economic financial statements before submitting them to government agencies and the statistics department;
- in anticipation of a tax audit;
- if desired, reduce litigation risks;
- in the event of debts and high production costs;
- if management plans to sell or acquire a running business;
- before attracting additional third-party investment.
Composition and results of the financial audit of the organization
A company that has undertaken to conduct a financial audit provides the audited organization with the following services:
- a complete study of the structure of assets and liabilities of the audited company, income and expenses for each type and separately for each type of financial activity;
- analysis of financial ratios, valuations and recognition of liabilities and assets;
- examination of accounting policies, including imputations and estimates;
- identifying the elements underlying the company's financial results in recent years and having a significant impact on its financial results;
- analysis of the movement of financial resources in recent years, as well as factors that have a significant impact on it;
- development of comments on the forecasts of the company's management regarding the prospects for the development of its financial activities;
- correlation of these forecasts with the volume of sales and the general financial condition of the company.
According to the results of the financial audit of the organization's statements, its management receives:
- independent expert opinion on the solvency, profitability of the company, the turnover of its capital;
- a full report on all factors of interest to him (the value of the company's net assets, the state of receivables and payables, including loans and credits, long-term and short-term financial investments, transactions with related parties, unrecorded liabilities, sales volume and inventories and etc.).
Thus, the audit of the financial activities of the company allows you to objectively assess the overall financial performance of the business, determine where and in what volumes cash flows companies, optimize financial performance, and assess the competence of internal financial service, correct deficiencies.
The procedure for auditing the financial activities of the company
When conducting a financial audit of an organization, the main stages can be distinguished:
- preliminary planning - getting to know the audited company, determining the scope and types of work, developing audit tasks, determining the cost of audit services, signing a contract;
- drawing up an audit plan, including the sequence and nature of work, developing an audit program;
- direct audit - analysis of accounting and financial statements, checking them for compliance with the norms and standards of legislation with the distribution of responsibilities between specialist auditors according to the approved program;
- drawing up an audit report - a document containing complete data on all violations, deviations, omissions, errors and shortcomings, tax risks discovered during the financial audit, as well as conclusions and recommendations of auditors for their elimination and reduction;
- issuance of an auditor's report - a formal assessment of the reliability of information presented in the company's financial statements.
The auditor's report is signed by the head of the audit organization or a person authorized by him who has an auditor's qualification certificate; individual auditor.
