Corporate Audit is a thorough examination by internal auditors or external to a particular organization or company. The results of the audit are presented in the form of an annual report by the appraiser concerned.
Audit process this is done to ensure that the company has prepared accurate financial statements, prevent fraud, provide proper assessment and evaluation of the company's systems, and ensure compliance with applicable regulations.
That way, companies can make improvements, evaluations, and decision-making based on data that has been examined by auditors.
What Is A Company Audit?
Audit can be one way to see the financial condition of a company. In the case of an audit, one auditor. perform audit, matching, and analysis of the company's financial statements.
According To Roger H. Hermason, professor and accounting expert in the United States, audit is a process of collecting systematic data by an independent party carried out to objectively evaluate evidence about economic activity.
So, an enterprise audit is a process of data collection and evaluation by an independent party of the economic activities of an organization or enterprise.
Internal Audit section of the company
In conducting audits, companies can use internal and external auditors. Both work in teams consisting of several divisions and have different responsibilities. Some of them are as follows.
- Information technology audit division - responsible for evaluating the company's Information Technology (IT) systems and infrastructure.
- Division operational audit - responsible for evaluating the company's business operations in accordance with policies and procedures.
- Division performance audit - responsible for assessing the effectiveness and efficiency of the company in achieving strategic objectives.
Types of audits in the company
1. Internal Audit
Internal Audit is examination carried out by employees of the company. Responsible for checking the effectiveness and efficiency of the company's management, evaluating the company's risk management and procedures, to investigate fraud (fraud or theft).
After the data is collected, the auditor conducts an analysis and assessment of the company's reports. After that, the auditor reports in the form of a document and submits it to the management and the board of directors. The results of the auditor's report can be used to make changes or make decisions related to the system or company management.
2. External Audit
The external Audit is checks carried out by external auditors or outside the company. Some companies sometimes use internal and external auditors simultaneously, because external auditors can act independently so that the audit process avoid bias.
The job of the external auditor is to evaluate the accuracy of the company's financial records. They ensure that the records have met the standards and comply with the legislation.
3. Audit IRS
Audit Internal Revenue Service (IRS) is an inspection by government tax authorities. The auditor is in charge of ensuring the company's books and financial records in accordance with the rules in the national tax law.
Matters examined relate to compliance with tax payments, tax debts, or there are additional fines to the government.
4. Forensic Audit
Forensic auditing is examination by special auditors both internal and external parties, such as anti --fraud and law enforcement agencies.
In this case, companies need forensic auditors when there are allegations of fraud or fraud, corruption, embezzlement of large funds, to document-based fraud. Auditors are tasked with collecting evidence, analyzing fraud, identifying modes and perpetrators, and preparing court evidence.
5. Information Systems Audit
Information Systems Audit is an examination of the infrastructure and risk management strategies used by the company.
Checks are carried out to assess the security of the systems used, ensure data integrity, ensure the system runs effectively and efficiently, comply with regulations and policies, to reduce negative risks to it.
6. Social and Environmental Audit
The examination carried out by the social and Environmental audit deals with the economic activities of the company that have an impact on the social and environment.
The Auditor is responsible for assessing whether the company's policies and activities affect the community, employees, or surrounding communities, its labor practices are fair, and the reports provided are honest.
Benefits Of Internal Audit For Companies
In a company, examination and assessment become two important things to do. Through these activities, the company can grow and develop in a better direction and avoid negative risks that may arise. Therefore, it is important to involve internal auditors to evaluate the company's finances. Here are some of its benefits.
- Increase internal control - auditors recommend things that need to be improved in the company's operationalization, so that it can run safely, effectively, and according to the rules.
- Optimize operational efficiency - auditors provide reports related to matters that are appropriate and need improvement, so that any inefficient or redundant processes can be corrected.
- Minimize risk - the auditor can identify risks that may affect the achievement of company goals as a preventive measure.
- Improving legal compliance – auditor. help ensure that the company's operations comply with applicable regulations and policies.
Examples Of Company Internal Audit
To get an in-depth understanding of corporate auditing, here are some examples.
- Internal financial Audit: aims to ensure accurate financial statements and no deviations. Matters reviewed related to recording transactions, financial statements, cash and bank reconciliation, expenses and income, to the company's compliance with accounting standards.
- Operational Audit: aims to improve operational performance. Matters examined include production processes, warehouse management, inventory management, to sales and distribution processes.
- Audit of Human Resources (HR): aims to ensure that practices undertaken by Human Resources (HR) fair and in accordance with regulations. Matters examined related to HR policy compliance, recruitment processes, attendance and attendance records, to assessment of employee performance.
Audit companies in Indonesia
If you are planning to conduct an audit of the company with an external auditor, there are several audit firms in Indonesia that can be relied upon. Among them are the following.
1. Deloitte Indonesia
Deloitte Indonesia offers comprehensive audit to tax consulting services. The company is renowned for their proactive approach in helping companies anticipate regulatory and market changes.
2. PwC Indonesia
PwC Indonesia serves financial audits to management and technology consulting services. The hood is famous for its comprehensive and detailed approach. They not only give lapora, but also additional insights up to internal improvements.
3. KMPG Indonesia
KMPG offers audit services that can be tailored to the needs of the company. One such audit is the issuance of an independent Audit report (LAI) which is usually required by construction companies. KMPG is known for its technology-based approach, so it can provide fast and accurate audit results.
Closing
A corporate Audit is an examination of a company's financial condition by internal and external auditors. Checks are carried out to optimize operational efficiency to improve legal compliance.
Through the audit process, the company can evaluate and take appropriate steps when there is non-compliance or fraud in the company.
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