A audit is an official inspection or assessment of the accounts of a company or entity, which usually refers to the assessment of the financial side of things. Private companies and organizations need regular auditing to ensure that their financial health is in good shape and that they have a good financial standing in the industry.
A private company audit report is produced after the audit has been conducted. The audit report includes important information that is related to the audit, as well as the result of the audit or the audit opinion. Through an audit report, a lot of things are determined, which allows a lot of things to be done. Here are some useful private company sample audit report and templates that will serve as your reference as we learn more about it.
Sample Private Company Financial Audit Report Template
Sample Audit Report for a Micro Company
Incorporated Associations Sample Audit Report
Sample Financial Audit-Report Template and Terms of Reference
Editable Private Company Audit Report Template
What Is the Difference Between an Internal Audit Report and External Audit?
There are two main types of audit and they are internal audit and external audit. Judging from how they are named, you would automatically think that an internal audit is an audit done within a company or organization and an external audit is done outside a company or organization. Sure thing, you got the internal audit part right. But conducting an audit outside of a particular company or organization doesn’t really make any sense does it? To help you, here are some of the differences between an internal audit and and external audit.
Just by their names, you can pretty much tell that an internal audit is dine by an external auditor and an external audit is done by an external auditor. The internal auditor works for the company as an employee an not as an independent agent. An external auditor on the other hand is not an employee of a company. They could be from a private or public firm or an independent entity providing auditing services.
Now, is there really a difference? Both internal and external auditors work for the company so they are of course hired by the company. If you try to look deeper a company is really big and it is made up of a lot of departments with their own employees supervisors, managers, and there is the CEO, president, vice president and other big bosses. So which one of them hires the auditors? Since internal auditors are employees of the company, they are hired by the management. External auditors are appointed by the shareholders of the company through a shareholders vote. Why can’t they just hire and agree with one auditor? That is because there are things that only management will know that will never reach the higher ups unless an audit is done.
The Scope and Limitations
Although both auditors do the same auditing tasks, there is somewhat a difference between what they can and cannot do when it comes to auditing. For external auditors, they pretty much are not restricted to doing any auditing tasks. They are free to inspect and assess whichever aspect or area of the company they want to look into. Contrary to external auditors, the scope that internal auditors can cover is limited to that of what management allows them to do or not to do. What power do they have against the management who hired them? Well, you can actually defy your manager if you are willing to lose your job.
Internal auditors focus more on company related issues, like the presence of any possible risks in the company, the company business practices executed, and other related issues. External auditors focus more on the financial side of things, specifically financial records. The findings of an external audit or the audit opinion is based on the financial statement of the company.
Audit Report Format
External auditors are free to use the audit report format that they want to use or that they see is appropriate for the audit that has been conducted. Internal auditors once again don’t have this kind of freedom. They must use the audit report format that is required by the company to be used for any internal audit report.
So, to whom should these auditors report to? You might have already known from the hiring party part. Since internal auditors are hired by the management, they are responsible to the management. This means that they report all of their findings and assessments to the management. External auditors are voted by the company shareholders so they are responsible to and report to the shareholders.
How frequent should an audit be conducted? Internal audits are done regularly throughout the year. Why not, when you have employed an internal auditor. That is basically an advantage. External audits are done only once a year, so companies better be doing things by the law to avoid getting a bad audit opinion and a bad reputation.
Private companies can have both internal and external audit functions to ensure that their records, financial statements, processes and other company related activities or operations are examined closely on a regular basis. So if you were an auditor, would you want to be an internal auditor or an external auditor? Other related articles you might want to check out are Data Audit Report Samples & Templates, Management Audit Report Samples, and Forensic Audit Report Samples & Templates.
Sample Association Audit Report
Printable Private Company Audit Report Template
Private Company Audit Report Sample
Simple Private Company Audit Report Sample
Independent Auditors Report on Private Company
Uses of an Audit Report
An audit may be generally referred to as an inspection or assessment of financial accounts that is why we automatically think of financial inspection upon hearing this word. But that is just not the case nowadays as there are many other forms of audit being conducted in different companies and industries, which also produce audit reports containing different important information. Let us take a closer look at the different uses of an audit report.
- An audit report is a document written by either an internal or external auditor, where they record all the details of their audit assessment, as well as the outcome of the audit or the audit opinion.
- Previous audit reports are compared to the new ones in order to determine if the company has made any achievements, improvements or changes over a particular span of time.
- It is also used as a guide as to what specific actions a company should do to answer to attend to an issue that has been identified through an audit.
- Part of an audit report is a feedback about the what has been identified and assessed about the company during the said audit. It is not necessarily an advice, but it is enough to let the company know on what things they are lacking.
- Businesses who are looking into finding a potential business partner use external audit report because it provides an honest and reliable source of information. Investors also use external audit reports this way to find the best company or business to invest their money in.
- Applying for a loan? Then you will need an audit report. Lending institutions rely on external audit reports to certify certain information and use this one of the basis for approval.
What other uses of an audit report do you know of? There sure are a lot, but we can’t possibly list all of them here as it may just take forever to finish. But you can always learn more about audit reports by checking out related articles with useful samples and templates. Some titles you may be interested in are Stock Audit Report Samples & Templates, Environmental Audit Report Samples & Templates, and Daily Audit Report Samples & Templates.
Tips in Writing Effective Audit Reports
Tips will help you make things better, regardless of the nature of the task or thing that you are doing. This is absolutely true when it comes anything. And since we are learning about audit reports, here are some useful tips on how you can write effective audit reports.
- Follow the required audit format. No matter how good or impressive your audit report content is, if you are not following the right format for the report, then you are probably up for some criticizing or you may need to revision the whole thing. Who knows which one is worse.
- Prepare an outline before you actually start writing about the contents. This way it will be easy for you to arrange the contents of your audit report.
- Address your audit report the right people. Make sure that you spell their names right and use the correct designation or position of each individual on your report.
- Take time to proofread your work. Do some spelling and grammar check. Revise your work as necessary. Keep in mind that minor errors such as spelling an grammar errors are a major turn off and will make your work look unprofessional. Don’t lose face and start proofreading.
- Use clear and simple words to avoid confusion and misunderstanding. As much as you want to impress your manager or client with your vocabulary, your report should focus more on being understandable than impressive.
If you have to choose between being impressive and being effective, you should choose the latter. You obviously can’t impress anybody if what you are doing is something that does not work.
We hope that you are able to learn about audits and audit reports in this article. Other titles that you might as well find useful are Tax Audit Report Samples & Templates, Information Technology Audit Report Samples & Templates, and Compliance Audit Report Samples and Templates.
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