A financial audit aims to ensure that the records are accurate, and represent fair transactions for the company. An audit can be conducted internally by the workers or externally by a certified account firm. However, some auditors specialize in offering services to specific companies, and there are different things that you should know. Here are 3 key facts you need to know about specialized auditing.
1.Planning the Audit
The first thing that you should consider before undertaking specialized auditing is to plan the audit. The engagement partner should plan the audit, and they should also seek assistance from appropriate team members within the organization. When planning the audit, the members involved in the process should comply with specific requirements that are relevant to the particular industry involved.
Each organization is supposed to follow specific standards, and these define the auditor's responsibility to plan the audit properly. When planning a specialized audit, you need to take into account elements like planned risk evaluation procedures and the planned responses to the identified risks. Planning is a continuous process when undertaking an audit, and it should include the input by strategic players in the company.
The purpose of carrying specialized auditing mainly relates to organizational performance. Different parameters are used to measure performance in each industry. The auditors are primarily concerned with collecting evidence that is related to the organization's performance versus details that verify the company’s compliance or conformance to standard procedure. The CPA firm serving the insurance industry aims to offer personalized services to different companies in this sector. The philosophy of offering personalized service is based on the notion of providing responsive audits that suit the specific needs of companies in the highly regulated and constantly changing industry.
The auditor needs to establish an overall audit strategy when carrying out specialized auditing. This strategy outlines the scope, timing, and direction your audit will take. The auditor should consider different things when working out an overall strategy for auditing, and they should also follow a planned-out strategy. For instance, the auditor should perform the following factors:
- Report the objectives of engagement and the type of communications required
- Outline crucial factors of engagement and stating the preliminary results.
- Define timing and resources that are required to perform the engagement
In short, an audit strategy clearly outlines the guidelines that should be followed when carrying out an audit.
An audit is primarily concerned with evaluating and examining the company's financial statements to check if they are accurate. When carrying out specialized auditing, there are different things that you need to know. It is essential to plan the audit, set performance goals, and establish the overall audit strategy that the auditor must utilize. The auditor should also include the input of the engagement team when dealing with a specific industry. The standards set for each industry should guide the overall audit strategy for the company.