What is an audit?

You probably ever heard of an “audit” once in your life. It’s not weird when you don’t exactly know what audits are. Some people will never work with audits in their life. But what is an audit? An audit is a control investigation to determine the status of a certain aspect within a business, done in a kind of report. There are different kinds of audits, but in this article, I will explain more about the financial audits.

What’s it?

A financial audit is an audit that examines the full financial status of the organisation. The report will determine the level of your financial status. It tells you everything about the financial performance and position of the company. When the financial audit is made, a lot of leaders find out things they never knew before.

What is examined?

As a said, the full financial performance is examined. There are multiple aspects within this. When you investigate a financial audit, you will find a balance sheet, the income statement, the changes in equity, the cashflows and most important the explanations of certain things. 

Can I make an audit by myself?

Yes, you can make a financial audit by yourself. A lot of companies do their audit mandatory, but when you are not good with numbers it’s smart to hire an audit firm to do the work for you.

Why do it?

It’s important to make a financial audit for a few reasons. First, you have an overview on your financial situation. Because of this, you can improve on certain aspects within the company. Second, you can show partners that your situation is healthy. And last but not least, in the Netherlands a yearly financial audit is required for companies that:

  • Have a net turnover in excess of at least 12 million euros
  • Gave value of assets of at least 6 million euros
  • Have 50 or more employees