A financial audit is an impartial, objective review of an entity or company’s financial records and financial reporting procedures. In the United States, the Financial Audit Manual or FAM provides a framework for performing audits of federal agencies ‘ financial statements in compliance with professional standards. It includes three volumes; Volume 1 is methods for auditing, Volume 2 is comprehensive guidelines for implementation, and Volume 3 is checklists.
6 Steps on How to Conduct a General Financial Audit
Step 1: Collect the Required Documents
Since it is a finance audit, the first step involves collecting the required documents related to the finance of the company. This includes sales receipts, invoices, and bank statements, etc. Study the processes put in place to provide the accounting department with financial information. Once you have collected all the required documents, you need to send them to the accounting department to get them processed. Keep in mind that if the information is not prompt and unbiased, accounting records themselves may become inaccurate.
Step 2: Gather Info on the Company’s Records
The second step involves gathering information concerning the company or organization’s record-keeping policies. This is done to check if the company or organization is storing the information is being stored properly. Generally, small businesses hold cash register records, canceled checks and invoices, and other documents. You need to make sure that the archived records are easily accessible.
Step 3: Checks the Accounting Methods
The third step of the audit involves checking the accounting methods of the company. You need to define and study each aspect of the accounting system of the organization. This includes the debit and credit accounts, journal entries, current accounts, and other required ones. You will have to work systematically to ensure that all required reports are available and that T-accounts or the debit and credit accounts are reported punctually to the general ledger.
Step 4: Analyze the Policies on Internal Control
You need to inspect and evaluate the internal control policies of the company to assess the level of protection they provide against theft and fraud. Internal control procedures include items such as splitting accounting responsibilities among different employees, locking safes to keep unpaid bank deposits, and password-protected accounting software that monitors precisely who is doing what and when.
Step 5: Compare the Records
Compare internal cash reserves reports, income and expenditures to external records. Check the registered external records of the business and compare them to internal records, but with selected transactions. For example, you can compare the purchase receipts from the suppliers against internal purchase records for a certain month or compare cash register tapes against income recorded on the books.
Step 6: Check the Tax Records
Once you are done with the comparison of the internal and external records, you can proceed to check the tax records. This includes the internal tax records of the company and the official tax returns. Generally, tax records are kept registered for seven years. For example, you can search through the organization’s IRS tax receipts and link them to reports of tax liabilities.
6+ Financial Audit Manual Templates in Google Docs | Word | Pages | PDF
1. Financial Audit Report Template
A financial audit is conducted to test and evaluate the financial policies, rules, and statements of the organization under question. Once the audit has been conducted, the report for the same needs to be prepared. You can make this audit report with the help of this report template. This template is available for download in Google Docs, Word, and Pages formats. You can also use this template to create a gao financial audit manual.
2. Financial Reconciliation Audit Manual Template
Financial or accounting reconciliation is the method of ensuring the account balance is right at the end of an accounting period between two accounts. If you want to develop the manual for the same, then this manual template is the best thing for you. You can even use this template to make a gao/pcie financial audit manual.
3. Office Financial Audit Manual Format
You have been tasked with the making of the financial audit manual for your office. However, you do not know the proper format to follow to make this manual. Stuck in a situation like this? No need to worry because we can get you out. All you have to do is download this federal financial audit manual template and you are good to go!
4. Financial Audit Manual Template
The financial audit manual is the tool that provides the framework for conducting the audit in federal agencies including their financial statements. Do you need to develop this manual for your use too but are having trouble with the task? Then this financial and compliance audit manual template is the perfect thing for you.
5. Basic Financial Audit Manual Simple
You have been tasked with the making of the audit manual for your organization. However, you realize that you do not know how to make the manual. Stuck in this situation? No need to worry, we can help you out. This financial attest audit manual template provides a ready-made sample of the same to make your task easier.
6. Internal Financial Audit Manual Template
No matter the kind of financial audit that you are doing, internal or external, you will need to develop a manual for the same. And that is exactly what our financial audit manual pdf template is here to help you with. Just download this template on your PC. This file is very simple and easy to understand.
7. Sample Financial Audit Manual
With this Sample Financial Audit Manual template, you can get your hands on a model of a financial audit manual that you can use as a reference guide to making the same for your organization. The template comes with original and suggestive headings and content that have been written by professional writers.