In the field of financial services audit, auditors are instrumental in the verification of companies in various areas such as banking, investment among others. Verify account information to ensure compliance and accuracy of information that is recorded. And deal with wealth management activities. They are involved in protecting the assets of their clients and companies.
These audits are very useful because they minimize fraud and errors that are perpetrated on business and its clientele. Whether it is banking audit or checking the practices of asset management, auditors perform the role of pillar of trust in the financial field.
What are Financial Audits or Financial Services Audits?
A financial audit is an analysis of financial documents. These records could be as simple as counting how much money was received, and how much was used. It is similar to tallying employee allowance.
An auditor is an individual who performs an audit; the auditor scrutinizes everything. They review receipts, bills, and other documents. In their field, their main concern is to make sure that the figures are correct. If the digits are not in matching then it indicates that something is wrong.
Financial audits are important as they demonstrate trust. Through this, companies can convince people that they are honest. Banks can ensure customers that their cash is secure.
Who Needs Financial Audits and Why?
To Check Accuracy
Audits check that all the accounting calculations are correct or not. Consider small errors too because small problems or errors can also be dangerous and can harm business in the future.
To Stop Cheating
If someone is stealing, or taking money without reporting, an audit will be quick to tell this.
To Follow Rules
There are certain policies that govern how money is handled by governments, and or banks. The enforcement of these rules is facilitated through audits.
To Build Trust
When a company is audited and they pass, it is a sign that the company is a reliable one.
How Long Does a Financial Audit Take?
The time required to perform a financial audit also depends on size.
- Small Companies: It can take a few days.
- Medium Companies: It might take 1-2 weeks.
- Large Companies: It may take up to a month or even more.
Do Charities Need Audited Financial Statements?
Yes, some charities require an audit. Charities take money from people; therefore they must not be liars. It is important because it assists charities to reveal where the money goes through audited financial statements.
For example:
An example of a campaign related to personal necessities involves a charity where money is collected to purchase school books.
The audit will find out if this money was used to purchase school books.
Do Charities Need Audited Financial Statements?
The law states that large charities must have audits. A small charity organization may not require one. However, small charities could also request an audit in order to gain the trust of the donors.
Who Does Financial Services Audits?
Financial audits are conducted by auditors. These people are well trained on handling cash and computations.
There are two types of auditors:
Internal Auditors
Those people who perform their duties under that company and firm. They observe the company’s money on a regular basis
External Auditors
These are people from outside the company and they include investors, customers and others. They are also hired to conduct special inspections.
External auditors provide independent information. They assist in supporting the correctness of the company’s financial inventories.
Steps for a Financial Audit?
The process has several steps:
- Planning
- Collecting Information
- Reviewing
- Reporting
The auditor communicates with the company in order to know what has to be verified.
What Happens in a Financial Services Audit?
Collecting Information
They collect every document that contains a record, receipt, and bill.
Reviewing
During the auditing process, the auditor considers every aspect as a task. This is important whether they are working within a company’s headquarters or at a branch location, as they perform calculations in order to verify their precision.
Reporting
After completing a task, they prepare a report. This report indicates whether the finances are accurate or not.
Final Thoughts
To check one’s Financial wealth, financial services audits are a very important process. They assist companies, banks, and charities remain trustworthy. Audits reveal where money goes and whether records are accurate or not.
FAQs
Why Do We Need Audits?
Audits check money records. They identify errors and prevent fraud.
How Often Are Audits Done?
It is common for most organisations to perform audits at least once in a year.
Can Audits Find Fraud?
Yes. Audit results can reveal that someone is embezzling funds.
Are Audits Expensive?
The cost varies according to the size of the company. Large organizations spend more on audits.
Contact Us for Free Advice:
To discuss how Accountants in Slough can assist you with your Accounts Preparation, please contact us for a free, no obligation consultation on: 0333 772 1616 or complete our Contact form and we will get back to you.
