The term “audit” can often cause panic and fear, but an audit doesn’t have to disrupt your organisation: it can effortlessly form part of your operational processes and not impose many additional demands on your resources. Working with registered company auditors and internal audit specialists who really know your business and your industry is key to ensuring you stay on the right side of Australian legislation.
What is an Audit?
An audit is a reasonable assurance engagement where the auditor provides an opinion about whether a company’s financial report is prepared in accordance with particular requirements or legislative framework (e.g. the Corporations Act 2001 or the Australian Charities or Not-for-profits Commission Act 2012). This includes giving a true and fair view of the financial position of a company at year end, and of its financial performance for the period ending on that date, and complying with Australian Accounting Standards and certain legislative requirements.
Bishop Collins Audit Services
Bishop Collins specialise in audit and assurance services delivered in the most efficient, effective and personalised manner. We are the premier audit firm on the NSW Central Coast serving clients across the Central Coast, Sydney, Hunter, and New England regions, and throughout Australia. We are the auditors of choice for organisations from public companies through to unincorporated associations.
Some of the industries we specialise in are:
- Not For Profit (NFP) Audit
- Registered Clubs and Hospitality
- Aged Care and Retirement Village Audits
- Public and Private Company Audits
- Import and distribution
- Education providers and private schools
- Religious organisations
We also specialise in local component and subsidiary audits for foreign-owned multinational companies.
Our team has extensive experience across a wide range of sectors. We take the time to really understand your organisation and leverage our experience and expertise to assist clients and add value.
Internal vs External Auditing
Both internal and external audits are completed with a high degree of independence, diligence and ethics. Both seek to provide an independent opinion about a company’s finances or practices. However, they differ significantly when it comes to who performs the audit, its overall purpose, and its scope.
Here is a brief snapshot of these differences:
Internal audit standards usually focus on a specific area of a company, while external audits look at all relevant financial information and any other practices that could confirm the veracity of financial statements and disclosures. In some circumstances, an external audit might be scoped to provide an opinion on a specific line item or financial schedule.
Internal audits focus on measuring current performance or compliance with particular policies or procedures and finding areas for improvement. An internal audit is primarily focused on helping an organisation improve and helping to achieve your business objectives while managing risk. An internal business audit is beneficial to evaluate and improve the effectiveness of risk management, control and governance processes. You can read more about the “flavours” of internal audit here.
External audits, on the other hand, focus on verifying the accuracy and veracity of financial statements, thus providing reliable information about the results of a company’s operations, its financial position, and its cash flows. You can read more about external audits here.
External auditors are from a third party (i.e. independent firm) while internal auditors can either be internally appointed and work on behalf of a company, or an external firm, and report independently to the audit committee or Board.
The Key Benefits of Hiring an External Auditor
External auditors mostly focus on ensuring that the policies and procedures of the organisation are adequate and meet regulatory requirements and standard practices and ensuring your financial records are comprehensive. The focus is primarily on financial compliance and accuracy. In Australia, external auditors are registered with the Australian Securities and Investments Commission (ASIC). Importantly, there are a variety of benefits in undertaking an external audit (whether legislatively imposed or voluntarily), including:
- Fraud deterrence and prevention;
- Confirm compliance or departures from relevant legislation (e.g. the Corporations Act 2001 or Australian Charities and Not-for-profits Commission Act 2012);
- Provide confidence to stakeholders (e.g. customers, shareholders, creditors and the general public) that the company is financially sound;
- Identify ineffective or inefficient business or operational practices.
Talk to Bishop Collins About Your Company Auditing Needs
It’s simple; with Bishop Collins Audit, auditing businesses is our speciality. We listen. We educate. We deliver. If you would like to discuss your organisation’s external audit requirements, the audit and accounting experts at Bishop Collins would be delighted to have an obligation-free and confidential discussion with you about our company auditors. We provide solutions beyond compliance and help you to protect your assets and move toward achieving your goals.
External auditors mostly focus on ensuring that the policies and procedures of the organisation are adequate and meet regulatory requirements and standard practices. The focus is primarily on financial compliance and accuracy. An external auditor knows the auditing requirements and can deliver the audit reports and financial reports your company needs to ensure you’re operating legally and efficiently.
No. All industries and types of businesses adhere to different standards, legislation and laws, even if some of these are standard across the board. For example, clubs, aged care facilities and not for profit organisations have very different auditing needs. Finding an auditor who is a specialist in your industry is key.
Many large organisations, including publicly listed companies, have established internal audit functions to satisfy and boost shareholder and market confidence as well as mitigate broader risks. External audits must be assessed on a case-by-case basis, however for the most part, public companies, large private companies and many not-for-profit organisations are required by law to have an audit at various times.
Internal auditing is important for monitoring and assuring that your business has been properly secured and safeguarded from threats. An internal auditor provides objective insight, assesses organisational controls, evaluates risk, improves efficiency and ensures legal compliance.
If any of the above apply to your business, contact Bishop Collins now and join our satisfied clients who already enjoy the benefits of our fully integrated bookkeeping service.
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