When thinking that your company will start its first audit, it is normal to consider how your company should be minimally prepared, since financial, accounting, payroll, tax, internal controls and numerous other information are audited depending on the company profile. The auditor performs a series of preliminary works at the beginning of the audit and, specifically, must analyze the particularities of the company and the sector in which it operates.
From this, the fundamental basis for the auditing work is accounting information, so this process must have been planned and prepared.
The first audit is always a novelty in the company, it is normal that the usual procedures for carrying out the work are not known. As this is the first audit, the preparation of the documentation, as well as the meetings that will be held with the auditor, will take longer and more complicated than in subsequent audits. Once the first audit is approved, those responsible for the company already know how the process is carried out, how the auditors work and what documentation to be prepared for the start of the following audits.
Usually, the auditor will tell you what information he needs before starting his work. With this information, he will be able to start his task more effectively on schedule, since he was able to analyze the financial statements in advance and will be aware of which accounting accounts are the most significant and in which areas the review work is necessary.
It is standard for the auditor to submit a list of the basic accounting documentation that he will need to carry out his work, so that it is prepared before the start date of the auditing work. This list will contain a checklist of the information to be verified. The documentation list must be requested in a timely manner so that it can be properly prepared. The content of the checklist will, of course, depend on the type of company.
The documentation to be prepared may be much more extensive if the auditor previously requests a copy of internal information, such as the company's structure. However, in the case of a first audit, it is more common for this type of information to be requested in person during a meeting, thus allowing for a more detailed discussion of the same with the company's managers. It is also possible, in the case of companies that have an internal auditing department, to request access to the audit reports prepared by this department.
The documentation may also be expanded, containing requests for details of the accounts relevant to the audit. It is important to highlight the need to oversee all information before handing it over to the auditors, to ensure its correctness and consistency. Later, the auditors will request more details of a few more accounts and verify the physical supporting documents of certain entries. It is relevant to verify that the detailed lists that are submitted to the auditing team match the general information.
In a first audit, more verification work is generally necessary, since it is the first time that the auditor evaluates your company. However, in subsequent audits, the level of verification tests may be lower, especially if the company's level of internal control is perceived as adequate by the auditor.
The auditor needs a series of basic accounting documents to carry out his work, which must be prepared before the start date of the auditing work. This list will constitute a checklist of the information to be verified. The necessary documentation varies from one company to another, but as a general indication, the company must have prepared, before the start of the audit, a copy of the articles of association and amendment of the articles of association, accounting balances, annual accounts at the closing date of the year, balance sheet, income statement, statement of changes in equity, statement of cash flows and company report, the list of tax settlement models for the audited year, as well as having updated the respective minutes books, both of the Board of Directors of Management and management of the General Meeting.
Contact TATICCA — ALLINIAL GLOBAL, which provides integrated auditing, accounting, tax services, corporate finance, Financial Advisory, Risk Advisory, technology, business consulting and training. For more information, visit www.taticca.com.br or email taticca@taticca.com.br. Our company has professionals with extensive experience in the market and has certified methodologies for carrying out activities.
