Corporate auditing firms in India as an independent form of financial control are today the only tool for providing reasonable guarantees regarding the reliability of accounting (financial) statements to all interested users, one of which is the state. Audits are an integral part of the activities of any self-respecting company, the results of audits are published on websites and confirm the status of the company.
The activity of a particular company depends on the quality of the work of internal audit service providers in Delhi: the auditor’s report affects the reputation and relationships with counterparties. The approaches and tools of external audit can and should be used for internal control (audit) since not all enterprises are subject to mandatory verification by an external audit.
Auditing is not limited to analyzing information about the state of accounting and the reliability of financial statements, but also provides analytical information for making informed management decisions, for example:
- Determining the dynamics of enterprise development (growth, stability, recession) and developing appropriate strategies;
- Identification of possible risks and the formation of measures to minimize them (for example, based on an analysis of the capital structure);
- Calculations of the influence of competitive market factors (for example, the dependence of demand on consumer preferences, the level of competition in the business of the audited company).
Currently, a high-quality audit is a check of the business, its effectiveness, and prospects. Based on the results of the audit, the management of the enterprise needs to outline reserves for increasing the efficiency of activities, factors for increasing profits, reducing losses in current operational activities and future periods.
Another important area of using the results of an audit is to improve the internal audit (internal control) system, which is an important tool in the company’s activities. The internal audit allows you to identify various risks of the company and prevent them promptly.
Analysis of the internal control system as a source for making management decisions
The main purpose of using the results of an external audit by the owners and management of the enterprise is to eliminate all identified errors and miscalculations in the organization’s activities, to minimize the identified risks that depend on internal and, if possible, on external causes.
The results of the analysis of the client’s internal control system are a source of information for making the necessary management decisions by the owners and management of the enterprise. They must be used to develop the external strategy of the enterprise, improve internal business processes, and improve the financial situation.
Conducting an internal audit of a company comes as a promising solution which can not only solve the problems of information support of the enterprise management system with the subsequent acquisition of the opportunity to make effective decisions but also, being independent (organizationally and financially subordinate directly to the owners of the enterprise), timely identify and promptly respond to deviations in the functioning of the internal control system.
The effectiveness of the activities of the internal audit service itself may well be shown by the results of an external audit, for this, it is only necessary for decision-makers to show their interest in this. We recommend enterprises that are not subject to external audits actively use external audit tools when making management decisions.
This content is meant for information only and should not be considered as an advice or legal opinion, or otherwise. AKGVG & Associates does not intend to advertise its services through this.
Posted by:
CA Aman Aggarwal
AKGVG & Associates