登录查看更多内容

Last updated on 2024年8月24日

How do you ensure precision when reconciling discrepancies between internal and external audit reports?

由人工智能和领英社区提供技术支持

Reconciling discrepancies between internal and external audit reports is a meticulous process that demands precision. This is crucial for the integrity of financial reporting and for maintaining stakeholder trust. Internal audits are conducted by the organization's own audit department to assess the effectiveness of internal controls, risk management, and governance processes. External audits, performed by independent auditors, focus on the accuracy of financial statements and compliance with applicable laws and regulations. Discrepancies between these audits can arise due to differences in scope, methodology, or timing. Your role is to systematically address these differences to ensure that your financial records are accurate and reliable.

此文章中的业界达人

由社区从 6 条内容中精选。了解更多

Romiluyi Sola

Senior Internal Control Officer at Dangote Group of Company
Anshuman kumar singh

Chartered Accountant || District Topper, AIR-30 ||

1 Understand Audits

To ensure precision when dealing with discrepancies between internal and external audit reports , you must first thoroughly understand the scope and objectives of each audit. Internal audits are designed to evaluate and improve the effectiveness of risk management, control, and governance processes . They are more operational in nature and may cover a broader range of topics than external audits. External audits, on the other hand, are primarily concerned with verifying the accuracy of financial statements and ensuring compliance with statutory requirements . By appreciating these distinctions, you can better identify the reasons behind the discrepancies and address them effectively.

添加您的观点

Romiluyi Sola

Senior Internal Control Officer at Dangote Group of Company
举报内容
Once, you identify the source of discrepancies, make necessary adjustment in your internal records to match them with external documents. The correction should to reflect the true financial situation.

已翻译

赞
CA Rabindranath Maiti

Audit Consultant/Freelancer (Ex Audit Head Adani Group). Architect for preparation of Audit Scope in large and Complex Organization for fulfilment of highest Corporate Governances and Installation of Management Control.
举报内容
Internal Audit mainly focused on Management Control Tools like Operation MIS System, Financial MIS, Compliance Management and Various Process documents and its actual practice. If any major Gaps identified by Internal Audit, there they like to assess the Impact due to Gaps of Practices. Like how much loss arise and may arise etc. In case of Statutory Audit, Auditors given Independence Report on Management declared Financial Statement after corroborative of various Audit Testing etc. If there is major gaps come about any figures and Internal Control Process there Statutory Audit may discuss with Internal Auditors about their Scope and limitation of Audit Scope(If any) whether same bring notice of Board. About figure both can discuss freely.

已翻译

赞
Hasan Zaman

Finance Manager | MBA |
举报内容
The reconciliation process is a crucial part of the audit process, involving teams to review and reconcile discrepancies between reports. This process involves identifying the root causes of discrepancies, gathering supporting documentation, and verifying data accuracy. It involves engaging stakeholders, facilitating open communication, and documenting the process. Corrective actions are implemented to identify the root causes and improve future audit coordination. Regular touchpoints between audit teams ensure alignment and continuous refinement of the reconciliation process.

已翻译

赞

2 Gather Evidence

When discrepancies arise, gathering detailed evidence is essential. This involves reviewing the audit workpapers , which contain the auditors' documentation of the procedures performed, evidence obtained, and conclusions reached. By examining these workpapers, you can understand the basis for the auditors' findings and assess whether the discrepancies are due to errors, misinterpretations, or differences in judgment. Ensure that all evidence is thoroughly documented and organized, as this will be the foundation upon which reconciliation efforts are built.

添加您的观点

Fantom Lukenya

Accounting Manager
举报内容
Internal audit evidence: This refers to the company's documentation. It includes policies and procedures, financial records, internal reports, employee interviews, and internal system-generated data. External audit evidence: This refers to the documentation obtained from external entities. In the situation of discrepancies Internal Evidence should be applied .

已翻译

赞

3 Analyze Variances

Analyzing variances between internal and external audit reports involves a careful examination of the differences in findings. Look for patterns that may indicate systemic issues or one-off errors. It's important to consider the context in which each audit was conducted, as this can influence findings. For example, timing differences or changes in business operations since the internal audit may explain some variances. A clear understanding of each variance is necessary before you can reconcile the reports accurately.

添加您的观点

Anshuman kumar singh

Chartered Accountant || District Topper, AIR-30 ||
举报内容
Once, while as statutory auditors for a solar manufacturing firm, I came across the problem of inventory valuation. The internal audit gave a higher inventory level than that which we found three months later. Further review revealed that the company had undergone a change to a new inventory management system, which explained the reporting errors upon inception. These understandings during these respects usually explain that this variance was a one-time error because of a system transition and not a systemic problem. With an understanding like this and the ability to reconcile the reports, our Team were able to provide valuable recommendations for future audits.

已翻译

赞

4 Engage Auditors

Engaging both the internal and external auditors is a critical step in reconciling discrepancies. Open communication can clarify misunderstandings and provide additional insights into the reasons behind different findings. Discuss specific variances with the auditors to understand their perspectives and methodologies. This dialogue can often lead to a resolution of discrepancies as auditors may offer explanations or additional evidence that was not previously considered.

添加您的观点

5 Implement Changes

After identifying and understanding the discrepancies between audit reports, implementing changes is key to reconciliation. This may involve adjusting accounting records to reflect accurate information or updating internal control processes to prevent future discrepancies. It is essential that any changes made are in line with Generally Accepted Accounting Principles (GAAP) or other relevant accounting standards. Ensuring that both internal and external auditors agree on these changes is crucial for maintaining consistency and accuracy in future reports.

添加您的观点

6 Monitor Results

Finally, monitoring the results after reconciling discrepancies is crucial for ensuring ongoing precision in financial reporting. This involves reviewing subsequent internal and external audit reports to confirm that the issues have been resolved and that no new discrepancies have arisen. Continuous monitoring also helps in identifying areas where internal controls can be strengthened to prevent future variances between audits. By keeping a vigilant eye on the outcomes, you can maintain high standards of accuracy and reliability in your organization's financial reporting.

添加您的观点

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

添加您的观点

Jagjot Walia, MBA

More than just bookkeeping, we've helped our clients: ? Increase profitability by an average of 20% ? Save an average of $23,000 in tax, per year ? Get back an average of 100 hours of their time, per year
举报内容
Internal Auditors generally test the internal controls of the company which can include Revenue Recognition, Cash and other cycles by documenting and then testing those cycles by selecting a sample. Internal Audit always helps to prepare for external audit.

已翻译

赞

Accounting

+ 关注

给文章评分

我们借助人工智能创建了此文章。您认为这篇文章怎么样？

很棒不太好

举报此文章

查看全部

How do you ensure precision when reconciling discrepancies between internal and external audit reports?

1

2

3

4

5

6

7

1 Understand Audits

2 Gather Evidence

3 Analyze Variances

4 Engage Auditors

5 Implement Changes

6 Monitor Results

7 Here’s what else to consider

Accounting

给文章评分

感谢您的反馈

更多Accounting相关文章

更多相关阅读内容