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A corporate audit is either an internal or external review of a company’s financial information. An internal audit is a review by a company’s staff to ensure compliance with specific corporate requirements. External audits review a company’s financial statements for accuracy, validity, and appropriateness. To prepare for a corporate audit, a company should schedule a meeting with the auditors, prepare copies of financial information for review, work with auditors during the fieldwork phase, and have a follow-up meeting. Internal audits may be less formal than external audits.
A meeting is always necessary to prepare for a corporate audit. The initial meetings focus on hiring a competent auditor who has a worthy track record. Once hired, the company and auditors move forward with creating a schedule. The audit time line depends on the audit length, breadth of review processes, and cost the company is willing to pay. Other items may arise during the meeting that need decisions from either the company or the auditors.
A prepared-by-client list includes all information that will undergo review during the corporate audit. The initial meeting is the place that auditors learn about the company’s operations and create the prepared-by-client list. The company is then responsible for gathering this information and having it ready for the corporate audit. A company typically needs to create copies of original information as auditors will not return these reports. This information stays with the audit firm as part of the evidence for the audit.
The fieldwork phase is where the bulk of the audit work happens. During the fieldwork phase, the company often needs to prepare for interviews with auditors. During a corporate audit, auditors interview and observe a company’s workers in order to ascertain how well the company operates and remains in compliance with internal or external rules. To prepare for this phase, a company needs to schedule time and inform employees about the audit. This allows employees to understand how they can best help their company.
Companies need to prepare for the final audit meeting as this is where auditors explain their results and issue the report. This meeting needs to include all the important individuals who will be affected by the audit. The meeting should not last more than a few hours. In some cases, the accounting or audit firm will be in on the meeting. Preparation for this meeting often starts with a review of the audit findings that lead to questions regarding the process.
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