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Pre- Audit
The preliminary phase of an audit prior to the official examination of the accuracy of an organization’s financial statement, predominantly used to establish the scope of the audit and the areas of concern. Provides a platform for:
- Gathering background information, documentations and records.
- Error rectification and prevention of ‘audit-time surprises.
- Providing point-in time financial picture of the organization
CSR Audit
CSR is an initiative to evaluate and take accountability of the company’s effect on the environment and society by addressing the well-being of internal/external stakeholders.
Strategic business benefits of CSR audit are:
- Assists in creating a positive brand awareness
- Increased employee satisfaction,
- Reduced operating costs,
- Improved community relations and corporate accountability.
Legislation:
“The Ministry of Corporate Affairs (MCA) has vide its notification dated 27 February 2014, and in exercise of powers conferred by section 1(3) of the Companies Act, 2013 (‘the Act’), notified 1 April 2014 as the date on which the provisions of section 135 and Schedule VIIof the Act shall come into force. The MCA has also notified the Companies (Corporate Social Responsibility Policy) Rules, 2014 (‘the Rules’) to be effective from 1 April 2014.”
Quality Audit
Quality audit is a methodical and an autonomous examination to determine whether activities of a firm complies with the planned arrangements and whether these arrangements are implemented effectively and are suitable to achieve pre-defined objectives.
It is an effective mechanism to verify compliance regulation audits with two important goals:
- Audits are intended to verify that manufacturing and control systems are operating under a state of control.
- Audits permit timely prevention of potential problems.
Quality audits can be used to establish a high degree of confidence on the product and services delivered to the end users.
Inventory Management
Control over inventories is crucial function for all organizations, as the inaccuracies in inventory records can cause erroneous management decisions.
Inventory Management intends to verify the accuracy of inventory records by creating mandatory checkpoints and controls. The process involves assigning the proper carrying value to the inventory, so it can be reflected properly in the company’s financial records.
Some of the activities which TRC can assist clients in are:
- Store leader updation
- Physical Verification & Stock taking
- Surprise Checks to identify the real position of inventory
One of the basic tools for this purpose is a physical count of the inventory on hand, which can be compared with the financial records to detection or validation.
Concurrent Audit
Scrutinizing the real time financial transactions at the time it has taken place/ parallel with the other transactions and checking its authenticity. Concurrent audit is mainly used for:
- Providing a clear ‘point-in time’ financial picture of an organization
- Delivering an error management tool
TRC, has expertise in conducting concurrent audit on behalf of banks and various financial institutions.
Internal Controls Over Financial Reporting (ICFR)
ICFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.
Policies/procedures entailing a company’s ICFR are:
- Maintaining company’s records with reasonable details, accuracy and fairness; reflecting the transactions and dispositions of the assets of the company;
- Providing reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts/ expenditures of the company are prior management approvals.
- Providing reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Legislation:
“Section 134(5)( e) of the 2013 act requires that in case of listed companies, Directors’ Responsibility Statement should, among other matters, state that directors had laid down internal financial controls and such financial controls are adequate and were operating effectively Rule 8(5)(viii) of the Companies Rules, 2014 Requires the board report of all companies to state the details in respect of adequacy of internal financial controls with reference to the financial statements also Section 143(3)(i) of the Act requires the auditors’ report to state whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls”
Tailored Audit
Tailored audit is ‘Customized Audit’ function designed to cater organization’s need. It takes the generic audit to a new level through the addition of client expectations, policies and processes.
The process involves preparing documentations covering pre-defined critical business requirements. Tailored-audits follow the standard auditing principles.