Money begins to flow when your company has been moving about and doing its business. Whether you’re making or losing money, it is crucial to document all accounts. To keep everything transparent and accurate, easily accessible audit sheets must be made. It also guarantees the accuracy of all records kept and the trustworthiness of your claims. As such, audit sheets are a good method of keeping your audits as orderly as possible, making them go as smoothly as possible. To that effect, we have here some easily customizable templates that you can use to make auditing much easier for you and save you your precious time; after all, time is money.
What Is an Audit Sheet?
Audit sheets are a form that is used to organize and streamline the process of auditing. It serves as an auditor’s checklist or guide as to what to check and where to check amongst the many financial documents a company may have. Whether it be finding mistakes or falsifications, an audit sheet will greatly improve the speed and efficiency of an auditor. All in all, it is a beneficial auditing tool that many would find hard-pressed to leave behind.
You might be curious why you would need to audit. The answer is simple, to straighten, organize, and make efficient the finances of a company. Auditing is an investigation from an objective point of view, breaking down the expenses of items and their processes and revealing what is necessary and what can be cut out. Without auditing, unchecked spending can sometimes spiral out of control. Thus, causing a hemorrhaging of funds leading to the possibility of the company shutting down.
The Dangers of Fraud and Embezzlement
Embezzlement is a big issue that plagues both big and small companies, which might happen to nearly anyone. It is a crime that rips through business relentlessly and ends up costing up to fifty billion dollars yearly. With so much to lose, one would think small companies would go to great lengths to try to prevent it from happening in the first place. Sadly, such a thing cannot always happen. When the perpetrators are the people who work for you, it becomes hard to tell who you can trust from who you can’t, and this leads to a problem of who you can give the authority for such sensitive information and finances.
Small businesses can lose thousands of dollars in a matter of weeks if left alone; the damage done to their bottom line is quite clear to see in comparison. While funds theft, however, is the most common, it is not the only thing that can be seen as fraud. Materials or equipment stolen can also equate to thousands upon thousands of dollars in lost funds, many of which are either taken apart first or sold as is. While the fraudsters may end up getting caught, there is no guarantee that the company will be able to regain what they had lost, potentially dealing a fatal blow to their financial state.
Reports show that a majority of fraudsters were people in trusted positions—those handling the important funds or equipment on a daily basis. This shows that companies and businesses need to invest in counter-fraud practices such as regular audits. By keeping a close eye on the financial state and moving as soon as something seems off, businesses can minimize the risk and loss that may potentially come from embezzlement.
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How Do You Make an Audit Sheet?
Making an audit sheet can be broken up into a few simple parts. Here are a few steps you can use to make your audit sheet from the ground up without having to over complicate things.
1. Account for All Necessary and Affected Items
The first step is to make sure that you have everything to be audited listed down as well as their corresponding financial statement. If it is not within the scope of the audit, do not include it. Make your audit sheet easy to access, clear, and concise.
2. Detail the Procedures and the Necessary Questions
By listing down the procedures and the questions needed to be asked, you get to the heart of the issue. Doing so allows you to find out and cut down on the unnecessary spending or cash leaks that may have surfaced during the negligence.
3. Organize and Arrange Your Audit Sheet
Once you have all the items, procedures, and questions listed down, you then arrange them in order. Having an order to go through everything will reduce if not remove the need to backtrack or go back, allowing for an easier and more consistent audit.
How many audit types are there?
Many people think that auditing is one single thing, but there are actually three different types of audits: financial, operational, and compliance audits. Financial audits usually only cover the finances of a company and are done by an external auditor. Operation audits are done internally and to look over the effectiveness of the employment, production, and management of risks. The final audit is compliance audits. It is a requirement by the government to be undertaken regardless of the status of a country.
What does auditing prevent?
The biggest thing auditing prevents is fraud or embezzling. By investigating and clearing up on the financial records of the company, it will uncover any missing funds if there are any.
How often do audits need to happen?
Audits happen as often as needed and are determined by the auditor. The auditors determine how often audits need to happen. They need to look at what needs auditing, decide how frequent it should be, and report the findings each time.
Is auditing alone enough to counter fraud?
While auditing is an effective method to counter fraud, it is not enough on its own. There are other ways to add safeguards and extra layers to prevent embezzlement, and all of them are recommended to be used.
Auditing is important in keeping a business afloat and ensuring that its financial state remains as it should be. With that in mind, audit sheets will, no doubt, be an invaluable tool to help keep the numbers straight and your business safe through auditing. With so many templates and samples to choose from, we hope to provide you with a means to keep everything running smoothly.