Most companies consider audits a necessary evil. Although audits may be “necessary” because they are required by a third party or an outside entity to satisfy compliance or to obtain services, audits do not have to be “evil”. The main purpose of an audit is to enhance the degree of confidence that intended financial statement users can place in the financial statements. This is good for the users of financial statements; however, audits are also good for the entities being audited as it provides confidence in the financial statements, discourages employee fraud and complacency, encourages proper processes and internal controls and leverages the expertise and knowledge of the auditor for the benefit of the audited entity.
An auditor that takes the time up front to learn about an entity, its environment , its people and its processes can successfully plan an audit so that it is efficient and effective and so that everyone benefits from the process. By using analytical procedures and appropriate risk assessment in the planning stage, the auditor should be able to plan efficient audit programs to target the high risk areas and minimize the overall substantive tests required.
Kevin D. Smith has spent years understanding businesses, systems and processes and countless hours obtaining knowledge in the accounting and auditing standards to provide the highest standard of excellence for audit engagements.