Audit

Internal audits take place within your business. As the business owner, you initiate the audit while someone else in your business conducts it.
Businesses that have shareholders or board members may use internal audits as a way to update them on their business’s finances. And, internal audits are a good way to check in on financial goals.
Although there are many reasons you may conduct an internal audit, some common reasons include to:-
⦁ Propose improvements.
⦁ Monitor effectiveness.
⦁ Make sure your business is compliant with laws and regulations.
⦁ Review and verify financial information.
⦁ Evaluate risk management policies and procedures.
⦁ Examine operation processes.
External Audit
An external audit is conducted by a third party, such as an accountant, audit professional, the Legal Eagle Law Associates (Private) Limited, or a Chartered Accountants. The external auditor has no connection to your business (e.g., not an employee). Like internal audits, the main objective of an external audit is to determine the accuracy of accounting records.
Investors and lenders typically require external audits to ensure the business’s financial information and data is accurate and fair.
Audit reports
When your business is audited, external auditors usually give you an audit report. Audit reports include details of the audit process and what was found. And, the report includes whether your financial records are accurate, missing information, or inaccurate.
Tax Audit
Income Tax & Sales tax audits are used to assess the accuracy of your company’s filed tax returns. Auditors look for discrepancies in your business’s tax liabilities to make sure your company did not overpay or underpay taxes. And, tax auditors review possible errors on your small business tax return Auditors usually conduct Income Tax & Sales Tax audits randomly. Tax audits can be conducted via mail or through in-person interviews as well as available statistics .
Financial Audit
A financial audit is one of the most common types of audit. Most types of financial audits are external. During a financial audit, the auditor analyzes the fairness and accuracy of a business’s financial statements.
Auditors review transactions, procedures, and balances to conduct a financial audit.
After the audit, the third party usually releases an audit opinion about your business to lenders, creditors, and investors.
Payroll Audit
A payroll audit examines your business’s payroll processes to ensure they are accurate. When conducting payroll audits, look at different payroll factors, such as pay rates, wages, tax withholdings, and employee information. Payroll audits are typically internal. Conducting internal payroll audits helps prevent possible external audits in the future.
Businesses should conduct internal payroll audits annually to check for errors in their payroll processes and remain compliant.