The basics of auditing and assurance services

Auditing and assurance plays an essential role in operations of any company. The capital markets as well as the economy at large depends a lot on trust, auditing and assurance services provide confidence to shareholders and helps them in the decision-making process. Auditing and assurance services are crucial in instilling confidence with their independent assessment of your company’s performance.

What’s the job of auditors and reviewers?

Many listed companies are required by the law to be audited. Many other type of entity such as non-listed companies, charities and even non-for-profit entities may require to have the financial statements audited and reviewed. This is necessary because shareholders are often quite separate from those managing and governing the companies and they need a reliable and independent source of financial information on weights they can assess the company and its performance. Besides shareowners, creditors, lenders, employees, prospective shareholders as well as the government and community need assurance of a company’s performance.

The job of auditors and reviewers is to review all financial statements and other range of information and present them in a true and fair view which is in accordance with accounting standards and law. If you are a company that the plans on funding or is planning to raise funds from shareholders and lenders, getting an independent audit review will prove your professional ethical standards and give your lenders the confidence they need to give you money.

The difference between internal and external audit

Internal audit is an activity that is overseen by the company’s board of management and is considered a part of the management tool. The primary focus of an internal audit is to measure effectiveness of the company’s internal control and adequacy. Shareholders, lenders, employees and everyone else for that matter may not consider this sort of auditing as independent.

On the other hand external audit is taken by an independent auditor who is appointed to express independent opinion and review of financial statements of the company as well as performance of the management within the company. External auditors report in accordance with the legislation or according to regulations established in a contract. Avoid group of stakeholders increasingly need credible information in regard to the performance and impact of companies in several areas such as compliance with regulations, greenhouse gas emissions statements, sustainability reports and performance audits. In all of these scenarios auditing and assurance services in Cyprus can help.