Audits
Auditing is the process in which a business undergoes an examination and verification of their financial records, as well as any supporting documents. A business may want to undergo an audit for various reasons including for purposes of attracting new investors, to secure a loan or even to sell the business.
The term audit, however, is normally associated with income tax. An income tax audit is an inspection carried out by the government seeking confirmation that an individual correctly prepared their taxes. The subject of an income tax audit is normally selected randomly through the use of a computer. In Canada, income tax audits are conducted by an auditor from the Canadian Revenue Agency or CRA. An audit usually takes about one to two weeks to complete. During an income tax audit, the taxpayer will be required to show documentation to support portions of their tax return.
Spotlight on Audits
How To Hire an Internal Auditor for Your Small Business
If you own a small business, hiring an internal auditor can be an important consideration. An internal auditor can be a tremendous asset to your company, helping in almost every aspect of your business processes and considerations. But how can you go about hiring an internal auditor for your smal... Continue Reading »
How To Hire an Internal Auditor for Your Small Business
If you own a small business, hiring an internal auditor can be an important consideration. An internal auditor can be a tremendous asset to your company, helping in almost every aspect of your business ...
Tips to Help You Avoid a Tax Audit
Tax audits are done on a regular, revolving basis. This is to say that the Canada Revenue Agency will commonly audit persons simply drawn at random. However, when it comes to a serious tax audit for ind...
About Audits
An internal audit is carried out by internal auditors whose primary role is the objective and independent review and evaluation of business activities, for the maintenance or improvement of the efficiency of the business processes, risk management, corporate governance and internal controls. The internal auditor's function is to evaluate the reliability, adequacy and effectiveness of the operational, accounting and administrative controls. This helps the business to ensure that its internal controls will result in the accurate and prompt recording of transactions, as well as the proper safeguarding of company assets. It will also determine whether the business is in full compliance with relevant laws or regulations.
An external audit involves the engagement of an independent auditor for the performance of a full-scope financial statement audit, a balance-sheet-only audit, to attest internal controls over financial reporting or apply other external audit procedures which have been previously agreed upon. An effective external audit report will provide the business with a reasonable assurance on the effectiveness of internal controls over financial reporting, the timeliness and accuracy in recording transactions, as well as the accuracy and completeness of financial and regulatory reports. Information contained in an external audit report provides the business with an objective and independent view of its day-to-day activities, including the processes which relate to financial reporting. Moreover, such information is useful in the maintenance of the risk management processes of the business.
During an audit, an open meeting is scheduled to discuss the objectives, timing and scope of the audit, and thereafter, conclusions are developed, and as well as recommendations suggested in an audit report, which is based on the results of the audit.