Feb 01 Types Of Audits
It is the time of year when individuals and businesses are gathering and organizing the information necessary to successfully file their taxes. While much of the information related to tax season and tax processes are for individuals, it is an important and busy time of year for businesses as well. Of course, it is businesses that are required by the IRS to furnish much of the information that individuals need in order to complete their returns. Because there are obviously more individuals who file taxes than there are organizations, the most of the media attention during tax season is focused on the stresses of the process for individuals. One factor in this media focus on individuals and their taxes, as opposed to businesses, is the relatively straightforward process most individuals face when they consider their taxes. Of course, there are exceptions; high net-worth individuals and those with complicated life circumstances or investments may not be able to count on smooth sailing through the ocean of the IRS. Businesses, on the other hand, are much more likely to face at least a slightly complex tax situation. As a result, the services that companies provide to ease the tax preparation burden for businesses are much more specialized and thus, further outside the purview of mainstream attention. Tax preparation and the general financial accounting organization that must be in place prior to tax preparation is really a constant process for businesses. One aspect of this process is auditing. As a testament to the aforementioned complexity of business bookkeeping, there are many types of audits a company may undergo. The most common association with the word auditing may be external auditing from the IRS; however, many businesses perform and benefit from many types of internal auditing that may be performed on a routine basis. Here is a look at a few such types of auditing.
Performance
Performance audits are audits companies conduct—via internal accounting staff or by hiring a Clifton NJ auditing specialist—in order to gauge the performance of some aspect of their operation. As auditing splinters into internal and external auditing and internal auditing splinters into many different types (including performance audits), so too does performance auditing splinter into several different types. Among the aspects of a business that may undergo a performance audit are environmental, safety, information systems and security. There are professionals who specialize in each of the previous categories of performance auditing, as well as those who specialize in types not mentioned. The process of auditing security and information systems has become increasingly routine and popular over the course of recent years. In general, all types of performance audits are performed with increasing frequency for nonprofits as the sector expands and competition increases.
Quality
Quality audits are audits companies conduct in order to make sure they are in compliance with certain internal or external organizational standards. Quality auditing is done by adhering as closely as possible to the most effective objective standards available for measuring how well a certain aspect of an organization is performing. Quality auditing may focus on areas of efficiency and success as well as areas of poor performance; the gathered information is then utilized by an organization to help maintain or optimize the productivity in a given area.
