When you conduct an audit in your organization, it is the duty of your account department to hire auditors who have enough experiences. Then, it is the duty of the service auditor to prepare the audit letter for the client company. The management and administrations must attest to all the important and essential information in the letter. When you provide complete information to the auditor, they would frame an accurate balance sheet evaluation. Audit letters are formed by the external auditors on behalf of the company.
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How can you frame an audit letter?
Step 1: Must contain a written statement
When you prepare to write an audit letter, then you must keep these simple things in mind. Firstly, it is the written statement or record between you and the company. And it is your duty to keep the details clear and transparent to the client.
Step 2: Must have qualified evaluation
You must mention in the letter about your evaluation of the finances or the account of the company. That’s why you’re hired by the organization. You must cross-check every detail in the statement before you note it in the final statement.
Step 3: Contains company’s financial evaluation
And you must attach the company’s financial statement to the letter for which you’re hired. The records are carefully attached to the letter so that the company can go through it and know the status.
Step 4: Must be fair and accurate
You must be completely fair and accurate with the numbers and figures. Because when it contains a mistake, whole calculation can be wrong and inappropriate. And, it shows your inefficiency as an auditor.
Step 5: Must mention solutions
You must mention the solutions to the financial loophole in the organization. With the solutions, you’ll be able to assist the organization to recover from the economic ups and downs. And, it will prove that you’re an efficient auditor with great skills to tackle the impromptu financial planning.
Who creates the audit letter for the company?
The audit letter is an important record through which the financial status and accounts of the organization can be studied. These things are looked at by the auditor whom the company hires for calculating the accounts. It is the work of the auditor to scrutinize every detail and find out the ways through which you can bring effective changes to the financial status or in the company’s budget. The auditor follows the legal procedures and acts accordingly.
It is the auditor that studies the accounts of the organization and find out ways through which it can earn more profit with less expenditure. Every organization must conduct the audit process annually. And, through that, you come to know if your company is facing a loss or a profit. The audit letter is prepared by the auditor on behalf of the entire company or the organization. The letter is for the company or the management as it is the complete financial image of the organization.
The auditor is assigned to look into the financial matter and find out the efficient way through which you can decrease the expenditure and can cover everything within the budget planned. With the financial status of the organization, it becomes easy to acquire the rough idea of creating the budget for the next year. The planning must be done on the basis of the previous year’s annual financial records. The letter must be brief in nature containing important points and views.
It is the prime responsibility of the management to provide the auditor with correct and authentic information taking help from the accounts department.
What are the beneficial factors of an audit letter?
There are quite a few beneficial factors of an audit letter drafted by the auditor. An auditor frames the letter relying on the facts that he gets after calculating the accounts and finances of the organization. So, it is utmost important thing that every factual information must be correct and genuine. When you create the audit engagement letter, there is the avoidance of the possible issue between the client and the organization.
And the audit letter is used as a reference document for future engagement. And it is an important document that shows that whatever figures it shows is completely authentic and reliable. An audit committee is created by the board of directors of the company to look into the financial matters of the company. It is the proof before the shareholders that they are completely exercising their part of the responsibility. With the engagement of the auditor, the committee proves its duty and responsibility.
What are the contents of the audit letter?
Every formal or informal letter contains a different format that you must follow when you write it. It is the external body or the auditor of the organization who must keep in mind when he drafts the letter. It must be formal and contain all the detailed data that the management needs regarding financial status. It must give descriptive information on the matter to make the reader understand what the letter conveys. The appropriate salutation in the letter is the must thing which you cannot miss.