What is an audit?

A lot of people might have heard from “audits” but do not exactly know what an audit is. It’s logical to have this problem when you have never worked with audits before. But now, what is an audit? An audit is a control investigation to determine the status of certain aspects of a business. This is done a report. Actually, there are a few different kinds of audits. In this article I will tell you more about the financial audits.

A financial audit

A financial audit examines the financial report of an organization. It determines if your companies financial status is all right. It tells you more about the financial performance and position of the company over the past period. It will give you a clear report with an accurate representation on where your company stands. 

What is examined in a financial audit?

There are multiple aspects reported within the financial reports. When you will look into it, you will find a balance sheet, income statement, changes in equity, cashflow and explanations. A financial audit makes sure those are done right and will determine if the figures and statements are right.

Who does those audits?

A lot of companies do their audits mandatory, but you can hire an audit firm to do the work for you. In the Netherlands, a yearly audit is required when the company has (at least two) of the following criteria:

  1. Net turnover in excess of 12 million euros plus
  2. Value of assest of at least 6 million euros
  3. 50+ employees