How to measure the economic performance and financial resources of a company? Day by day, companies analyze many variables of their business; nevertheless, from time to time a more exhaustive investigation, analysis and control work is necessary.
It is important to carry out this analysis in the most objective way and adjusted to the reality possible. Hence, a comprehensive audit is born, which focuses on evaluating the set of processes used by a company. It is a type of audit that covers the entire company and is really useful to know in depth this and also discover how to optimize both resources and processes.
What is a comprehensive audit?
A comprehensive audit is a process of objectively obtaining and evaluating a company’s financial information, its internal structure, whether or not it complies with applicable laws and regulations and if it achieves its objectives by the appropriate means. This type of audit manages to inform if the company in question, based on a detailed prior study, fits all the established indicators and criteria.
The comprehensive audit consists of:
- Determine if the financial statements of the company conform to generally accepted accounting principles.
- Determine if the company has complied or not with its regulations and statutes.
- Evaluate the internal control structure.
- Evaluate the degree of efficiency when it comes to achieving business objectives.
- Evaluate the environmental impact generated by the company, either directly or indirectly, that may arise during the development of its processes and products.
- Analyze the age, distribution and structure of the production plants of the company and the risks associated with it.
- The integral audit in a company will be carried out by an independent public accountant to said company.
Principles of Conducting Comprehensive Audit
To understand well what the comprehensive audit refers to, we here detail the general principles that define it:
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Independence
The auditors who carry out this type of audit in a company must act outside of any professional or personal impediment, thus guaranteeing a professional and reliable study.
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Objectivity
The judgment and conclusion that the auditor gives must be totally impartial and in accordance with the reality of the company and its professional activity.
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Permanence
The advisable thing for any business is that this integral audit is carried out of the periodic and regular way in the time, to guarantee like this the fulfillment of its objectives in the most efficient way possible.
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Certification
The analysis and the reports made by the auditors are true and are fully valid at the official and public levels.
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Integrity
The integral audit, as its own name indicates, comprehensively covers all the processes, areas and goods that make up the company.
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Supervision
Through the comprehensive audit, everything is supervised, from the processes and resources to the company personnel. In this way, the auditor will have sufficient information to make an assessment.
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Shape
The auditor’s report must be submitted in writing. You must respect the structure and paragraphs of the audit report that are required by law and show your opinion with any of the existing possibilities.
In short, the best way to fully analyze a company, to know its progress, what future prospects it has and to know whether human, economic or material resources are managed properly, must go to the completion of an audit comprehensive.
Hello everyone! This is Richard Daniels, a full-time passionate researcher & blogger. He holds a Ph.D. degree in Economics. He loves to write about economics, e-commerce, and business-related topics for students to assist them in their studies. That's the sole purpose of Business Study Notes.
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