Please note that recognizing types of audits can help you ensure the company has been running efficiently and optimally in several aspects.
Audit itself is an examination carried out by a company or organization periodically to evaluate performance, ensure compliance with regulations, and recommend future improvements.
The role of audit is quite crucial in a business or company because it helps the organization to continue to develop and identify possible risks that will arise.
The effectiveness of performance in the system or organization can also be ensured of its optimization, so that audits can prevent non-conformities that may occur with routine checks.
Types Of Audits Based On Their Implementation
In its implementation to check the information of a company to identify its compliance with the established provisions, there are types of audits that you can choose.
Here are the types of audits based on their implementation that you can choose to periodically check the organization:
1. Internal Audit
Types internal audit it is an examination carried out by internal companies, so the auditor team comes from within the organization.
In carrying out its duties, the auditor identifies audit findings from financial, operational, efficiency, effectiveness, and compliance with regulations and policies.
From the audit process, the auditor will report the results of the examination and identify potential problems so that they can recommend suggestions based on the audit report.
In reviewing a company's compliance with corporate regulations, government policies, and laws, internal auditors are potentially biased.
However, auditors should work with professionals to identify objectively without leaning on one side, because basically internal audits are carried out for the growth of the company for the better.
Read Also: 7 Differences between Internal and External Audit, Let's Know!
2. External Audit
Auditor team at the external audit comes from an authorized institution or public accountant to carry out checks on the company's finances.
In conducting the audit, the auditor will express an opinion as a result of the audit that the company needs to do as an improvement.
If the type of internal audit refers to the evaluation of the company to improve its quality, then the external audit is part of the types of audits that tend to be used to allow investors or outside parties to know the condition of the company.
External Audit those that come from outside are independent bodies that are assigned at a certain time. This is certainly to mitigate potential bias or attachment to internal parties.
Compared to internal audits that spend a lot of time, external audits have a fairly short duration depending on the fees paid.
Types of audits by purpose and scope
The following are the types of audits based on their purpose and scope, including:
1. Financial Audit
These first types of audits allow auditors to collect and identify evidence covering the financial statements of a company based on accounting standards.
Accounting standards such as Financial Accounting Standards (SAK) applicable in the country or International Financial Reporting Standards the international scale.
This is done objectively and systematically by independent auditors to ensure transparency, accuracy, and compliance of the company with applicable policies and regulations.
Financial audits are usually carried out to review the company's financial condition to be presented to stakeholders, such as investors, creditors, and others.
2. Operational Audit
Is one of the types of audit, where this examination is used to evaluate the company comprehensively which includes systems, operations, and processes that are run.
This allows every aspect of operations in the company, such as internal policies, procedures, company performance, and more will go through a thorough examination.
Purpose operational audit to identify inefficiencies that require improvement, review the efficiency and optimisation of resource use, and ensure compliance with regulations.
In addition, this audit is also used to analyze the effectiveness of risk management and internal control controls to prevent potential discrepancies in business processes as well as constructive suggestions to improve company performance.
3. Compliance Audit
Compliance audit is an examination conducted by the auditor to review the company's compliance with applicable regulations, rules, and standards.
An Audit from an independent agency will identify the effectiveness of the company in carrying out business processes based on checks on administrative documents, internal procedures, and policies implemented.
In this case the audit process can evaluate the company's management practices, safety systems, impact on the environment, and occupational safety in the work environment to ensure that it has been carried out in accordance with applicable regulations and industry standards.
Read Also: Understanding Audit Standards along with 3 Types and Their Qualifications
4. Forensic Audit
Other types of audits are forensic audit, which is an examination of the company's financial statements that is used as evidence of a case, such as fraud, embezzlement, or other illegal crimes.
A forensic auditor needs to know accounting investigation procedures along with knowledge of related laws regarding financial crimes and auditing. During the trial process, the auditor will be called as an expert witness to explain the results of the audit.
The results of this audit can be used as evidence in court to be submitted to authorized legal investigation bodies, such as the KPK, OJK, BPKP, DGT, and others.
5. Audit IT
It is a comprehensive examination of the company to evaluate the optimization and efficiency of its IT systems, policies, procedures, and infrastructure.
These aspects will be reviewed based on its optimization, efficiency of use, security of the system, and compliance with regulations.
Basically audit IT aims to assess the performance of IT systems, review possible risks, optimize operations, and improve quality with improvements.
6. Management Audit
The next type of audit is an examination carried out by an independent body to identify the capabilities and performance of the company's management.
In addition to reviewing the performance of comprehensive organizational management, management audit it also serves to identify the effectiveness and optimization of company resources in achieving targets.
This Audit also allows the identification of the performance of the team in carrying out tasks and providing advice and recommendations to company leaders regarding the performance of the company's management in the future based on the audit report.
7. Performance Audit
Performance Audit being one of the types of audits, where this examination is functioned to evaluate the economy, effectiveness, and efficiency of organizational resources in meeting the expectations of stakeholders.
In this case, the audit includes aspects of 3e which means, economic aspects, aspects of work efficiency, and aspects of effectiveness, where these three aspects are used to review an achievement, target, or achievement owned by the organization.
Types of public sector audits and private sector audits
As is well known that audits are not only carried out by a company, but also government bodies.
The significant difference between public sector audits and private sector audits is in political policy.
So that the financial management of the state is not only based on rational economics that refers to profit, but also on political and social policies.
While the audit of the private sector will tend to the efficiency, profitability, and sustainability of the business being run, without having to consider the political and social aspects.
Among the types of public sector audits are such as financial audits, performance audits, and audits with a specific purpose in government agencies.
The types of audits that are commonly carried out within the scope of the company are financial audits, IT audits, forensic audits, and so on.
Thus is an explanation of the types of audits that you can use as a guide to run periodic checks on your company.
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Audithink itself is an audit application that allows your company's audit team to plan, manage task management, report audit results, and monitor implementation. If you are interested in the functions of Audithink and want to learn more about this application, please visit the following page to schedule a demo!
