The objective of an audit of financial statements is the expression of an opinion on the financial statements. We will be responsible for conducting the audit in accordance with the standards established by the International Standards on Auditing (ISA), issued by the International Accounting Federation (IFAC). These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement, whether caused by error or fraud. However, the orientation of the work is not directed only to the review of accounting balances, but also to the validation of procedures and standards used to ensure adequate Internal Control.
For this reason, our work methodology is developed in the following stages:
- The first stage includes making an assessment of the internal control effectiveness in connection and in relation to the audit process of the financial statements.
The indicated review is carried out on the different operational and administrative flows, for this purpose Internal Control questionnaires adapted to the characteristics of each Company are used.
Once the review stage has been completed, a report is prepared, which, according to the Auditing Standards, aims to inform and learn about the weaknesses of the internal accounting control system of an entity, in particular to point out to the company’s management the deficiencies that are detected regarding the adoption of accounting practices, the maintenance of an effective administrative-accounting system and the establishment and maintenance of an effective internal control system, to establish the basis for trusting the system and determine the nature, timing and scope of audit tests to be applied.
Along with the evaluation of procedures, the review of transactions such as Sales, Purchases, Inventories and Payroll is carried out. In this way, audit work is carried out and complemented in the following stages.
2. The second stage is carried out at the closing date of the financial statements or very close to it.
The tonnage certificates of funds, documents and securities, a physical inventory of products and raw materials, and eventually of fixed assets, is conducted and observed.
In the same way, we proceed to the circularization of balances Banks, Loans, Legal Advisors, and others.
3. The final stage is carried out after the balance sheet date and in this stage a final review of the accounting figures that generate the financial statements and their respective notes is carried out.
The audit shall include examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, evaluation of the accounting principles used, significant estimates made by management, and evaluation of the overall presentation of the financial statements. In addition to a conceptual review of the aggregates and deductions applied to the determination of taxable net income.
Our work ends with the issuance of our opinion on the financial statements.
