Auditing Case

Abstract

Every major business that reports to the Security Exchange Commission, or any company that deals with shareholders has most likely had an audit completed at some point in time. Auditing is the process of examining financial records, statements, and data to clear the company of any mistakes or false information. This paper will examine how auditing has become a more frequent practice in the many companies and what a company’s staff can expect from an audit.

Audits

Auditing is nothing more than another way of explaining the verification of financial records a company possesses. Usually a third party comes in to conduct an independent investigation, gathering records, receipts, and as much information on the company’s financial records as they can. An auditor’s main objective is to prove to shareholders, and investors that the records provided by a company are accurate, truthful, and are in line with what the company is advertising. As Pickett (2001) explained, the auditor’s report to the board via the Audit Committee must have a resilience and dependability that is unquestionable and the audit product must add value to the employing organization. This helps in creating confidence and credibility in the company’s financial statements, which can have a positive effect on investors looking to invest.

What to Expect in an Audit.

If a company were to be audited, there are some things that the employees could look to happen during the audit. The account manager for a company will send a letter to the staff that are involved in the audit, letting them all know who has been assigned to conduct the audit (Epstein, 2014). An auditor may ask for verification of tax classification, review tax accrual accounts, capital invoices, and expenses for unexplained credits. Best described by Tripathi (2008), as watchdogs of public finances, the public auditors act as critical links in enforcing the accountability of executive agencies to national and state legislatures and through them to the general public. It is vital that employees that maybe posses a company credit card keep all receipts because these documents will surely be needed during an audit. For most company’s, the following records must be accounted for from the previous 13 quarters, or three years and three months; employee names and social security numbers, dates of employment, basis of pay, location of work, job titles and type of work performed, daily hours worked, time cards