Any company always maintains accounting records - ordered base data on all property and operations of the enterprise itself for a certain period of time.

Accounting includes information about what transactions were carried out, what property and funds are on the balance sheet of the enterprise and many other important information. However, accounting data is not always error-free and reliable. There can be two main reasons for this: a random error or deliberate falsification.

For example, all businesses pay taxes on their income. The more income an enterprise has, the more taxes it needs to pay to the budget. This situation, of course, is disadvantageous for the company owner, because he has to part with the money that he could take for himself.

In this case there arises temptation to falsify documents, underestimating the income received, or, on the contrary, increasing supposedly existing expenses. The second example of falsification is the distortion of information about the balance sheet of a company when it is sold.

The old owner can include in the balance sheet of the enterprise those items that have not been there for a long time - non-existent real estate, equipment and much more, in order to get more money from the sale.

It is to combat errors in accounting statements that audits exist. Audit – independent verification enterprises and accounting documents, that relate to this enterprise. There are two main types of such checks: internal and external. Internal audit is carried out on behalf of the enterprise itself.

It is important to note that even an internal audit can be carried out by an “outside” person - a representative of an audit company or simply an independent auditor. Such checks are very frequent, especially in large international companies. It is no secret to anyone that our fellow citizens are not always distinguished by their immense decency and honesty.

In this regard, investors, fearing for the safety of their invested money, often involve independent auditors to control the enterprise.

As for the external audit, it is carried out on instructions from the outside, for example, by the tax authorities. This is a more stringent form of control, because if with an internal audit “the dirty linen is not washed out of doors,” then with an external audit, the results of the audit can lead to many unpleasant consequences for the company’s employees, including the initiation of criminal cases.

This is why accountants, financial directors, and simply managers are afraid of audits like hell.

This check includes several stages, which depend on the type of activity of the company. First of all, the auditor examines the accounting documents and sees if they are all present. If any documents are missing, he draws attention to this, and if they do not exist in nature at all, he indicates this in the report.

The audit report also indicates all existing errors, inaccuracies or misrepresentations of data. For example, if the auditor sees in one of the points that the company has purchased 10 expensive cars, he can firstly ask to show him these cars (that is, confirm that they exist at all), and secondly leave an opinion on the necessity or advisability of their purchase.

Assessing feasibility is very important, primarily for internal audit, because very often investors are asked allocate money for goals and objectives that are not entirely clear to them. In this case, it will be completely normal on their part to want to see what this money was used for, and whether such expenses are necessary at all.

In general, auditing is a complex science, and only people with extensive work experience can work in an audit company or as a private auditor. in the financial and economic sphere. To an outsider, it may seem that the auditor simply reads the documents that are given to him and says whether all the data is indicated there or not.

In fact, this is not true - people who want to steal money from a company or otherwise break the law (for example, by committing tax evasion) are often very cunning and smart. They skillfully hide all their dirty deeds under real deals, and only an experienced and attentive specialist can distinguish between truth and fiction.

For example, when studying a company’s transactions over the last year, a bad auditor will say that everything is in order, but a good one will note that the company’s employees were bought lunches at twice the price (a small thing, but still a violation), or the manager did not indicate in the financial statements are the bonuses that he wrote out for himself.

It is these little things that most often escape the attention of ordinary people, but a good auditor is obliged to identify them and indicate them in his report. It is for this reason that the income of famous auditing companies often amounts to millions of dollars, but there are few such companies themselves.

Inna Shaiderova, financial director of PHILIN

They are listening to you

Audit (from Latin audit - listens) is an independent verification of the financial statements of an organization by persons entitled to conduct such an audit. Auditors check the activities of an organization for compliance with the law; they are primarily interested in the quality and reliability of financial statements. Simply put, an audit is the opinion of third-party experts about some aspects of your organization's activities. Moreover, you order and pay for the work of these specialists yourself.

Auditing activities are regulated by the Federal Law “On Auditing Activities” N 307-FZ dated December 30, 2008. It defines the requirements for the subjects and objects of the audit and the procedure for conducting it.

How often are audits carried out?

Typically, annual accounts are audited. But you need to keep in mind that the audit is not only mandatory, but also proactive. By law, all organizations whose activities fall under Article 5 of the Federal Law “On Auditing Activities” must undergo a mandatory audit. In most cases, NPOs must undergo an audit by December 31 of the year following the reporting year. The exceptions are NPOs performing the functions of a foreign agent, structural divisions of foreign non-profit non-governmental organizations and some other NPOs.

An initiative, or voluntary, audit can be carried out by both an organization that is subject to mandatory audit and an organization that is not subject to it. Any significant stakeholders may require a proactive audit: founders, board of trustees, major donors. Example: the fund’s donor changed and demanded that a specific auditing company conduct an audit of the fund. In NPOs, proactive audits are still rare, but in business they are common.

Which NPOs are required to undergo an audit?

The law sets out a number of clear requirements:

• All NPOs whose organizational form is called a “fund” are subject to mandatory audit.
• Non-profit organizations that are the owners of endowment capital with the book value of the property constituting the endowment capital, which exceeds 20 million rubles at the end of the year.
• If the amount of assets on the NPO’s balance sheet as of the previous reporting year exceeds 60 million rubles. This is possible if the company has, for example, real estate or expensive equipment on its balance sheet.
• NPOs performing the functions of a foreign agent and structural divisions of foreign non-profit non-governmental organizations.
• Non-profit organizations that are not the owners of the endowment capital, but receive income from it in the amount of more than 5 million rubles per year.
• Other non-profit organizations for which mandatory audit is provided for by Russian legislation.

If an NPO is not subject to mandatory audit, then to increase the transparency of its activities, it is possible to conduct a proactive audit. If an NPO is subject to mandatory audit, but does not conduct it, it faces a fine. However, paying a fine does not relieve the organization of the obligation to undergo an audit.

NPOs are required to submit their audit report to Rosstat, and foreign agents to the Ministry of Justice. And according to the new requirements, from October 1, 2016, information about the auditor who issued the report and the report itself on the completion of the audit must also be posted in the Federal Register within three working days. Penalties may also be applied for violation of these requirements.

The basis for starting an audit is the conclusion of an agreement with an audit company, which the NPO must choose itself.

Should you be afraid of auditors?

Audit is not a punitive tool. His task is to identify the organization’s problems, shortcomings and mistakes made by the accountant and management and point them out. Any auditor gives time to correct errors and shortcomings. Auditors are feared by those who did not pay sufficient attention to accounting during the year and did not comply with legal requirements. There are organizations that did not keep records at all during the year. You need to understand that it is extremely difficult to create an account from scratch during the audit; you can only correct minor shortcomings, for example, draw up some missing document.

In order not to be afraid of an audit, it is important to be sure that NPO accounting is done correctly and that the same attention is paid to this accounting as the main program activities.

Types of audit reports

The result of the audit is the auditor's report. This is an official document intended for users of NPO financial statements, in which the auditor expresses his opinion on the reliability of the statements. There are three options: positive conclusion, qualified conclusion and negative conclusion.

To obtain negative auditor's report, you need to “try.” For example, not keeping documentation at all for a year or making gross errors in accounting.

Conclusion with a caveat issued when the auditor has doubts about some parameter, for example, if a risk has been identified that exceeds the materiality level (materiality level is a percentage threshold showing the deviation of the balance sheet item reporting from the correct parameter, usually about 5%). Example: the financial statements should reflect fixed assets at historical cost, but the accountant made a mistake and reflected it incorrectly. If this deviation is no more than, for example, 5%, then it will not exceed that same level of materiality. Another example: tax legislation has certain rules for calculating and withholding taxes, which are not always clearly stated. There are many different explanations from the Ministry of Finance, which may contradict each other. Faced with such a contradiction, the accountant takes one of the positions, and most often the choice is made in favor of the organization. Moreover, if the tax office takes a different position during the audit, then there is a risk of additional tax assessment, which should be reflected in the balance sheet item “Accounts payable.” If the amount of risk does not exceed 5% of all obligations of the non-profit organization, it is considered that the level of materiality is not exceeded.

What is checked during an audit and what needs to be paid special attention to?

First of all, auditors check compliance with Russian legislation, including tax, labor, civil, compliance with established rules for maintaining accounting, personnel records and reporting, the reliability of financial statements, the presence of an internal control system and its compliance with the volume of transactions performed. The constituent documents are also audited to ensure their compliance with the actual activities of the organization.

First of all, attention is drawn for the presence and correct completion of civil law and financial and economic activity agreements. The accountant reflects the already prepared and completed primary document, however, errors may be made during execution.

Organization separate accounting between commercial and statutory activities is of fundamental importance. Tax legislation provides for an income tax benefit for targeted funds donated by a donor only if the organization keeps records of targeted funds separately from funds involved in commercial activities.

The lack of separation story is quite common. Such a mistake entails the risk of taxation of all funds that flow into the organization. There are situations when funds received in the form of donations are used to carry out business activities.

Example: An NPO received 1,000 rubles from a donor, spent it on producing postcards and sold them online. This is an inappropriate expenditure of a received donation used for business activities, which must be accounted for separately. In this case, you will have to pay taxes on this amount. How can you then find funds to carry out business activities? You can, for example, go to a printing house and ask to print postcards with deferred payment, or you can apply for a loan for 1,000 rubles, then the legal requirements will be met.

Auditors also check whether the activities of the NPO correspond to what is stated in the constituent documents. This is especially important for NPOs because donations are not subject to taxes, provided that they are spent on the purposes specified in the charter.

According to our observations, NPOs, expanding their activities, often forget to make timely amendments to their constituent documents, and it turns out that according to the documents the organization may be engaged in one activity, but in fact something else is happening. In this case, the use of funds may be considered inappropriate, and donations received will be subject to tax, to which a fine and penalty will be added.

The head of an NPO must pay attention to the presence of the organization’s estimate/budget. The estimate and budget should not be just an Excel file, but a document approved by the highest collegial body, for example, the foundation council. He also approves the report on the implementation of the estimate at the end of the financial year.

Administrative costs must be taken into account separately, especially for charitable organizations where there are restrictions: remuneration of administrative staff should be no more than 20% of total expenses.

If the assistance process is not formalized, NPOs will face problems. When working with beneficiaries there should be a program has been approved that outlines the process for allocating assistance. It usually begins with a statement from the beneficiary asking for help. Next, the NPO analyzes the request from the point of view of the established criteria. Based on them, we can identify a group of people in need that the NPO will help. The criterion may be disease, age, disability group, income level. These criteria will make it easier to work with beneficiaries when, when refusing assistance, the organization refers to its rules. In addition, using these criteria, you can prove to the tax office that the funds were spent in the intended manner. This is an important point.

Finally, auditors check the presence of an internal control system and its compliance with the volume of transactions performed. In simple terms, how, by whom and on what basis certain decisions are made, primarily regarding fixed assets, inventory, settlements with counterparties, and so on. In addition, checking the continuity of the organization's activities is of great importance.

NPOs risk not only money, but also their reputation, because people do not donate for fines and taxes.

All violations encountered by the auditor are displayed in extended report. It is confidential and is provided to the governing bodies of the NPO - the executive director, the foundation board, etc. A report and a conclusion are two different things. Conclusion is provided to a wide range of people, in which the auditor makes his assessment of whether the reporting of this organization can be trusted. Typically, organizations that have been audited try to publish their findings because it increases donor confidence.

A negative audit report indicates, at a minimum, the non-transparency of an NPO and, of course, can negatively affect trust in a particular organization. What kind of donor will give funds to an NPO where the accounting is all bad? When an audit firm encounters missing records or other serious irregularities, it will typically suspend the audit and notify management that if such a development occurs, the audit report will be negative. After the errors are eliminated, the scan resumes.

Audit, Ministry of Justice, Tax

There is an opinion that those who have passed the audit are no longer afraid of an inspection by the Ministry of Justice and the Tax Service. This is only partly true. An audit is not a panacea. Firstly, you need to take into account that the audit is carried out in a selective manner. The auditor does not review every transaction, besides, he is a human and may miss something. Secondly, the Ministry of Justice and the Tax Service take into account the results of the audit, but conduct audits according to their own methodology.

Of course, an NPO that has been audited has fewer risks. Auditors confirm financial statements and look at tax risks, because they affect the balance sheet indicators: if an NPO does not charge tax, it means that it distorted the balance sheet item. For the Ministry of Justice, the fact of an audit is especially important when it comes to foreign agents. If they fail to complete the audit on time, they will face a large fine. If an ordinary organization does not pass the audit, the Ministry of Justice will definitely write a comment and offer to correct the situation. An audit can also be carried out late. It is worth recalling once again that if your NPO is fined for not passing an audit, your obligation to pass it is not removed.

Inna Shaiderova, financial director of PHILIN:

“For NPOs that are our clients, we help them choose an auditing company that is optimal in price and quality. The client can agree with our recommendations or invite his own auditor, this is his right. When choosing an auditor, we hold a tender, meet with audit companies, inquire about their methods, prices, and ask how their audit goes. For our clients, we fully support the audit.

To pass the audit, you must submit fully completed annual financial statements. The accounting policy of the organization must be presented, which spells out how accounting is organized in non-profit organizations (here the legislation offers a certain variability). It consists of two parts - accounting policies for accounting and accounting policies for tax accounting. In the event of tax audits in the absence of an accounting policy, NPOs may face tax risks.

There were organizations in which records were not kept properly. In this case, it must be restored. We provide such a service. After the accounting has been restored, you can enter into an agreement with an audit company and begin the audit.

If the NPO did not attach much importance to paperwork from the very beginning, we will definitely help and try to explain everything. For example, we conduct seminars for our clients, where we talk about the legal requirements for the preparation of primary documents. Program activities are, of course, extremely important, but undocumented documents create a risk for the further activities of the organization. This point needs to be realized.”

Question answer

— Does the audit company have the right to directly report violations of the NPO to the board of directors, board of trustees or other governing body of the NPO?

— The customers of the audit report are the highest management bodies of the non-profit organization, therefore the extended audit report is intended primarily for them. It is in the extended report that all violations identified during the audit are described. The choice of an audit company must be agreed upon with the highest governing body of the NPO, which gives either its consent or refusal. But in practice, the governing body often delegates the decision on this issue to the head of the NPO. What happens to this report within the organization is a matter for the organization itself and that highest governing body. If the audit has been approved by the highest management body, then it, of course, must receive and read this report.

— What do donors pay attention to when studying materials about the activities of NPOs? What role does the auditor's report play here?

— A published positive audit report makes the activities of an NPO more transparent and increases its credibility in the eyes of the donor. The donor may well request an audit report. Sometimes large philanthropists may even ask an NPO to be audited by a specific auditing company they trust.

— Are there cases where an audit company issues an opinion without conducting an audit?

- Unfortunately yes. Such a conclusion will be considered deliberately false. These auditors act in violation of the law and risk their right to carry out further audit activities. If the auditor is caught doing this, his conclusions may be invalidated, and the NPO that used such services risks being fined.

• Difficulties during the first audit arise from careless documentation, lack of understanding of the requirements for registration and recording of documents. But gradually an understanding comes of how to maintain documentation. Passing the audit again is easier than the first time, since fears and concerns disappear.
• A difficult test for specialists and fund management is the restoration of primary documents - the audit pays attention to their absence first of all. Employees have to “mine” them again.
• If the organization understands the legal requirements and complies with them throughout the year, then there will be no rush at the end of the reporting period.
• You should not neglect accounting; you must maintain documentation. We have encountered non-profit organizations that could not obtain a positive audit report because they had not done accounting for a year or even longer.
• Periodically, you need to review the accounting policies of the organization, answering the question of whether it corresponds to the current activities of the NPO. Accounting policies are approved before the organization begins its activities and are applied consistently from year to year. Additions can be made to it, for example, if some new types of activities have appeared or legislation has changed.
• We are often asked: “What if the company approved the estimate at the end of the year, but circumstances have changed?” It is worth keeping in mind that budget items may be adjusted during the year. All adjustments must be approved by the appropriate highest management body. When approving the budget, you can immediately indicate the possibility of deviations in budget items within the range of 5-10%, for example, due to changes in prices on the market.
• If we remember the audit not on December 15, but a little earlier, then all problems can be solved.
• We recommend that those NPOs that have an audit deadline before the end of the year following the reporting year undergo an audit in the summer. During this period, auditors are not so busy with work, and NPOs have enough time to correct shortcomings and prepare missing documents. The fact is that all open joint-stock companies are required to undergo an audit by March 30, so summer is the quietest period for auditors, and the tariff during this period is lower, which is important for NPOs.
• Periodically, once every 2-3 years, it is worth changing the audit company, because one auditor’s view may become blurry. Changing the auditor will help obtain a more objective assessment of the NPO’s activities and provide greater transparency.
• A common problem for NPOs is incorrect completion of primary documents. Many managers believe that the most important thing in their work is to help those in need, and “paperwork” is the concern of accountants. This approach may result in fines. And paying fines is an inappropriate use of the donor’s funds, and therefore they are also subject to taxes. These are not only financial, but also reputational and tax risks.

The PHILIN (Philanthropy Infrastructure) project was created about two years ago by social investor and entrepreneur Ruben Vardanyan. One of his areas of interest is the professionalization of NPOs. The entrepreneur believes that it is necessary to promote the professionalization of charity in Russia so that it becomes more systematic, transparent and effective. At the stage of developing the project concept, the main problems of Russian charity were analyzed, as a result a number of initiatives emerged that will help solve them, in particular, comprehensive services in the field of administrative and accounting functions. At that time, there was no company in Russia that would comprehensively and systematically deal with reporting, finance, personnel, accounting and legal support for NPOs. The PHILIN project has become a pioneer in this area. In July 2015, he accepted his first clients. Now there are more than 30 of them, including such well-known foundations and organizations as “Children of Mary”, the Center for Equal Opportunities “Up”, “Big Brothers Big Sisters”, the charitable foundations “Vykhod”, “Old Age in Joy” and “Big Change” ", Association of Professional Participants in Hospice Care and others.

Any organization is interested in the impeccable order of its accounting. To achieve it, she can use different forms of control. One of the forms of monitoring the correctness and accuracy of business accounting is audit.

So, the audit is aimed at collecting, studying and analyzing all business transactions carried out by the audited entity during the reporting period for their correctness and accuracy of reflection in the documents.

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An audit can be either mandatory or voluntary.

Audit of calculations

In the course of its activities, the organization has all sorts of financial obligations:

• To suppliers.
• Before the budget.
• To creditors.
• To the staff, etc.

An audit allows you to identify violations in the calculations being carried out. What exactly does the auditor check in the organization’s settlement operations?

In the case of an audit of payments to suppliers, attention is paid to:

• Complete and correct reflection in accounting (accounts 60,62,76, etc.) of settlements with suppliers and contractors.
• Primary documents serving as the basis for the occurrence of settlement transactions, for their correct execution.
• Timeliness of settlement transactions.
• Reasons for the occurrence of accounts receivable, its structure.
• Actions taken by an enterprise to reduce accounts receivable.
• What work was done with accounts receivable that were expired.
• Correctness of writing off bad debts, etc.

The auditor, when checking documents related to settlements with the budget, looks at:

• Is the tax base determined correctly?
• How taxes are calculated: VAT, profit, property, etc.
• Correct tax accounting, preparation of relevant journals and books.
• Reflection of accrued taxes in accounting.
• Generated reporting.

When studying settlements with creditors, the auditor checks:

• Correctness and completeness of reflection in accounting of received loans and their repayment.
• Targeted use of received loans.

Analyzing calculations related to the payment of wages to personnel, the auditor draws conclusions on the correctness of calculation:

• Wages, financial assistance, sick leave for pregnancy and childbirth, vacation pay.
• Unified social tax and personal income tax.

Audit of operations

Business operations are all operations that an economic entity carries out in the course of its current activities. They change the balances on synthetic accounts and ultimately change the indicators in the balance sheet. Therefore, it is very important to timely and correctly reflect all completed transactions in accounting.

An audit of operations includes an audit of financial transactions with the property of an enterprise (fixed assets or inventory items), cash transactions, settlement transactions with counterparties, and transactions with intangible assets.

When checking an organization’s property, attention is paid to:

• Safety and technical condition of things.
• Correct registration of receipt, movement or disposal of property.
• The procedure for calculating depreciation.
• Completeness and correctness of reflection of relevant transactions in accounting.

The main points that the auditor studies when checking cash transactions:

• What is the balance limit for the organization's cash register?
• Is cash deposited in the bank on time?
• For what purpose and how much money is given out from the cash register?
• To whom are the funds issued, are there any unauthorized persons.
• How checkbooks are prepared and where they are kept.
• Are the cash register documents drawn up correctly?
• Timely reflection of cash transactions in accounting.

The auditor, studying the intangible assets of the enterprise, focuses on:

• Are assets correctly classified as intangible?
• Availability of documents confirming exclusive, patent, copyright rights.
• Correct assessment of intangible assets.
• Tax calculation.
• The procedure for reflecting intangible assets in accounting.

Types of audit of an organization

Depending on the criterion, audits come in different types. By audit objects there are:

• General.
• Bank.
• State.
• Exchange, off-budget funds, insurance organizations.

In relation to the organization being audited, there are external and internal audits.

An audit can be defined by the groups of operations it checks:

• Economic activity in general.
• Financial transactions in general or individual types.
• Financial statements.
• Enterprise management, etc.

In addition, depending on the relationship of legislation to audit, there are:

• Mandatory audit.
• Initiative audit.

Main stages of verification

Any audit goes through three stages.

• Preparatory. At this stage, the auditor gets acquainted with the client, enters into an agreement with him to conduct an audit, draws up an audit plan, and determines the scope of work.
• Collection of audit evidence. At this stage, the actual activity of the auditor is carried out, namely the collection, study and analysis of all necessary documents.
• Drawing up an audit report. This is where the information received is systematized and summarized. After the audit, an audit report is drawn up, which includes the auditor’s opinion on the reliability and correctness of the business accounting of the audited entity.

Who conducts the audit

An audit can be carried out either by individual auditors or by audit organizations.

To become an auditor, a person must meet a number of requirements:

• Have a higher education (economics or law).
• Have at least three years of work experience related to auditing or accounting activities.
• Possess certain personal qualities.
• Pass the qualifying exam and receive the appropriate certificate.

Requirements for audit organizations:

• The organization must be commercial.
• The number of auditors must be at least three people.
• Have an impeccable business reputation, etc.

What are auditors guided by?

• Federal Law No. 307-FZ of December 30, 2008 “On Auditing Activities” provides general concepts of an auditor and all related actions.
• Federal auditing standards regulate the procedure for conducting audits.
• The Code of Professional Ethics for Auditors contains the basic principles and rules of conduct for auditors.
• It is logical that when checking the economic activities of an enterprise, the auditor must know “how it should be according to the law.” Therefore, the auditor must be aware of all the latest changes in regulations relating to the regulation of business accounting.

In addition, the specialist must know all GOST standards for document preparation, requirements of tax authorities and other supervisory authorities.

Who is required to undergo an audit?

Art. 5 of the Federal Law “On Auditing” indicates who must conduct the audit.

Who is on this list?

• Open joint stock companies.
• Legal entities whose securities are traded on stock exchanges.
• Credit history bureau.
• Non-state pension fund.
• Insurance Company.
• Credit organisation.
• An organization whose annual revenue exceeded 400 million rubles.
• An enterprise whose balance sheet assets exceed 60 million rubles, etc.

The list in this article is not exhaustive; the legislator may provide for mandatory audits in other regulations.

For organizations for which an audit is not required by law, but will still be useful in the following situations:

• There has been a change in the director or owners of the organization.
• The organization is up for sale.
• The manager had doubts about the correctness and accuracy of business accounting.
• When attracting new partners or investors.

Audit results

As a result of the audit, an audit report is drawn up, which can be unconditionally positive or modified.

With an unconditionally positive conclusion, the auditor has no comments or reservations.

A modified opinion is issued when the auditor wishes to draw the auditee's attention to certain situations or factors that have arisen that may affect the auditor's opinion.

As a result of the influence of these factors, the auditor may express a qualified opinion, a negative opinion, or refuse to express it at all.

Responsibility for evading an audit

The auditor's report must be included in the annual financial statements. Otherwise, the tax authorities may not accept it, citing the fact that without an audit report, the reporting is not reliable.

For failure to submit the required documents within the prescribed period, the tax authorities may impose a fine of 200 rubles for each unsubmitted document on the basis of Art. 126 of the Tax Code of the Russian Federation.

Also, the court may impose an administrative fine of 300 to 500 rubles on an official for failure to submit reports to the tax authorities on time (Article 15.6 of the Code of Administrative Offenses of the Russian Federation).

According to the profile of the activity, inspections can be general, banking, inspections of non-governmental organizations, and so on. The nature of the inspection may be mandatory or voluntary. If the audit is carried out voluntarily, then only the documents and transactions listed in the audit agreement are checked.

If the audit is carried out voluntarily, then only the documents and transactions listed in the audit agreement are checked.

Financial or accounting audit

This is a check of the accounting statements and financial condition of the enterprise. The audit can be external and internal, depending on whether it is carried out by the company’s employees or entrusted to a third party. During a financial audit, the main stage is checking the accuracy of all transactions, the availability of all necessary documents, as well as checking whether the company’s data corresponds to those provided to the tax office.

Technology audit

During the process of industrial or technological audit, an enterprise or production facility is checked for many safety parameters. The purpose of the inspection is to establish the level of danger of production for the health of employees and others, the compliance of equipment and conditions with established standards. During the audit process, the auditor works with regulations, organizational documentation of the facility, and personnel management. Assess the condition of dangerous technical and production equipment. Analyzes the causes of accidents. Develops a plan for localizing and eliminating the consequences of an emergency or incident. As a result, production can improve safety, improve management efficiency and improve performance.

HR audit

In the process of personnel verification, all documentation in an organization with hired personnel is examined. The auditor checks compliance with labor laws and record keeping. At the same time, not only the overall effectiveness of the management apparatus is assessed, but also the performance of each employee, personnel processes and potential are assessed.

Who conducts the audit

The audit differs by type of verification - independent (external), state or internal. In the case of an independent verification, an agreement is concluded with a third-party organization. State is carried out if the order for it came from the official service. The sample of inspection and conclusion during an internal audit is not too different, but the inspection department is formed from the company's employees.

There are certain basic requirements for the company that will conduct the external audit or for the independent auditor.

Individual auditor:

• Has a completed higher education in economics or jurisprudence.
• Worked in an accounting or auditing organization for more than three years.
• Has a valid audit certificate.

Independent auditors do not have the right to audit some companies, including non-state pension funds, companies that engage in insurance and lending to the population, prepare consolidated statements, and some others.

Auditing organization:

• Commercial organization other than JSC.
• SRO accreditation.
• At least three certified inspectors on staff.
• The manager also has a valid certificate.
• The audit organization's share in the company's capital is more than 51%.

Is an audit required?

Verification may be mandatory or voluntary. Many managers decide to conduct a voluntary audit before major reports. A voluntary audit is often carried out before a purchase or during a change in management or chief accountant, as well as at the request of the company’s partners. Voluntary audits can be carried out at any frequency.

Mandatory inspection is carried out every year for joint-stock companies, non-state pension funds and companies engaged in insurance and lending; professional participants of the securities exchange. Also, verification is required during the period of preparation of consolidated statements. Other companies are required to conduct a scheduled audit if the total revenue exceeds four hundred million rubles and assets exceed sixty million rubles. These requirements do not apply to agricultural cooperatives, municipal enterprises and non-state unitary enterprises. Also, verification is not required for limited liability companies for the first year of operation (even if the volume of revenue exceeded the specified amount). The procedure for mandatory verification is regulated by Art. 5 of Law No. 307-FZ.

Preparing for an audit

The organization recommends creating a comfortable working environment for the inspector - ideally, this is a separate workplace with access to a telephone and computer. The auditor must have access to the accounting and records management departments. If it is difficult to reach the company by transport, it is recommended to organize a transfer for the auditor. If the company has a pass system, a temporary pass for the auditor must be ready for the first day of the audit - for this you need to find out the information of the inspectors in advance.

A person responsible for verification issues is appointed. Most often this is the chief accountant or deputy chief accountant of the organization. Contact details of other company employees may also be needed during the verification process - employees should be warned about this possibility.

If it is necessary to copy documents, the boundaries of the organization's trade secrets are specified. The activities of auditors are regulated by a set of domestic and international audit standards. Among other regulations, auditors work within the framework of the Tax and Civil Codes of the Russian Federation, and are also subject to Federal Law No. 307-FZ. There is also an internal code of specialists and the concept of audit secrecy, which protect the confidential data of the audited organizations.

The documentation that the auditor will require depends on the type of audit. A complete list of documents is reflected in the contract with the audit organization in writing. You may need a charter of the organization, registration documents, licenses for the type of activity being carried out, and so on.

During the verification process you will need:

• Reporting documentation for the audit period.
• Accounting policy document.
• Inventory report and warehouse accounting document.

At the request of the inspector, the following are provided:

• Lists of contracts, transactions, confirmations from counterparties.
• Information about court cases.
• Lists of shareholders, founders and partners of the company.
• Production information.
• Certificates from tax authorities.
• Primary documents.

How is the verification carried out?

Audit stages:

1. The company's management decides to conduct an inspection.
2. The organization enters into an agreement to conduct an audit with an audit firm. The contract must specify the purpose of the audit - internal audit of reporting, verification before reporting to regulatory authorities or the tax office, and others.
3. The company's specialists prepare a package of necessary documents to submit to the audit firm, or, in another case, auditors go to the company to collect information.
4. Auditors receive reliable information about the structure of the organization, the specifics of work, can familiarize themselves with the company’s accounting policies, receive regulations and audit reports from the tax office. If necessary, the auditor has the right to study the business plan and other documents according to which the work is carried out.
5. The auditor then focuses on examining the financial statements exclusively. The work is carried out for the period specified in the contract, the reporting of the branch or branches, if any, is taken into account.
6. During a financial audit, real indicators are compared with the plan, as well as with indicators for past periods and with information that was provided to the tax office.
7. A preliminary assessment of the company's financial condition is made.
8. Financial statements are reconciled, tax returns are reviewed, and accounting records are reviewed, including balance sheets and order books.
9. If accounting errors or discrepancies in results are found, the auditor determines the reasons for the inaccuracy. The legality of each transaction is checked.
10. Tax returns are audited on a per-digit basis. The auditor also checks the timeliness of filing returns and paying taxes. During verification, payment dates recorded in bank documents are used.
11. Based on the results of the audit, a report is drawn up, which the auditor must agree with the chief accountant of the audited organization.

A common case is overpayment or underpayment of taxes. In both cases the solution is quite simple. In case of overpayment, it is possible to contact the tax office, agree on the fact of overpayment proven during the audit, and issue a refund to the organization in the amount that was overpaid. If there is a shortage, the auditor can recommend a suitable solution for each auditee.

Registration of audit results

The audit rules require that a complete and reliable report be drawn up at the end of the audit. In addition, the inspection performer draws up a conclusion or report on the inspection.

• The main direction of the inspection carried out is reported.
• The stages of selective and full verification are listed.
• The identified problems and shortcomings are indicated in order of importance.
• Specific recommendations for solving problems are provided.

The report or conclusion of the inspection is a confidential document, which is drawn up in two copies. One is transferred by the inspectors personally to the chief accountant of the audited organization. The second is sent to an audit company, and subsequently the elimination of identified problems is monitored according to this report.

The audit conclusion consists of three parts - introduction, analysis and summary, confirmed by the signature of the certified head of the inspectors and the seal of the audit company or personal seal if the audit was carried out by an independent auditor.

Types of conclusions:

• Unconditional, that is, as a result of the inspection, no deficiencies were found. In this case, the financial position of the audited organization is considered stable, and the errors found are insignificant or do not require correction. If an unconditional conclusion is issued, there is a possibility that the inspection was carried out in bad faith.
• With reservations, there are comments recorded in the report. Identified reporting errors and shortcomings are easy to correct, and the assessment of the organization’s state, even taking these errors into account, remains positive. Recommendations were issued to eliminate deficiencies.
• Negative. The audit revealed serious violations, critical reporting errors, unreliable reporting or accounting documentation.
• Refused or not issued. The inspectors did not gain access to the necessary documentation, met with open confrontation and were unable to assess the state of the reporting. In the event of a forced termination of an audit, the audit organization officially notifies the audited company and higher authorities.

Most often, the audit report contains a positive conclusion, since most of the shortcomings can and should be corrected during the audit.

An audit has several important functions. In a large company, this is practically the only effective tool to reliably determine the status of documentation. Mandatory audit is imposed in certain situations so that partners or other interested parties can verify the reliability of the company and the compliance of real financial indicators with the declared ones.