23 May/12

Audits in the Global Economy

Audit checklist on a desk
Audit checklist on a desk

The general definition of an audit is an evaluation of a person, organization, system, process, enterprise, project or product. Most commonly, one refers to audits in accounting, but similar concepts also exist in other areas like project management, quality management, and process management.

It is distinguished between internal and external auditors who have mutual interests regarding the effectiveness of internal financial controls. Both professions adhere to codes of ethics and professional standards set by their respective professional associations. There are, however, major differences with regard to their relationships to the organization, and to their scope of work and objectives.

The internal auditors are part of the organization. Their objectives are determined by professional standards, the board, and management. Their primary clients are management and the board. External auditors are not part of the organization, but are engaged by it. Their objectives are set primarily by statute and their primary client – the board of directors. The internal auditor’s scope of work serves the organization by helping it accomplish its objectives and improving operations, and processes. The primary mission of the external auditors is to provide an annual opinion on the financial statements. The work of the internal and external auditors should be coordinated for optimal effectiveness and efficiency.

Since auditing is a very vital part of accounting, audits were mainly associated with gaining information about financial systems and the financial records of a company or a business. However, recent auditing has begun to include non-financial subject areas, such as safety, security, information systems performance, and environmental concerns in an effort to optimize the internal processes of a company or increase the efficiency of programs and individuals alike.

This shift in perspective has created a high demand for trained professionals who can perform specialized audits in almost any business field as well as the non-profit sector. In addition, auditing has increasingly become an international business in itself that requires global auditing qualifications from both the company being audited and the auditors.

When working in an international environment, it is necessary for the company or organization to have the audited information ready in foreign languages for subsidiaries, partners, and shareholders. Likewise, as audit professionals often face challenges in obtaining fast and accurate translations of foreign financial texts, it is imperative to have a trusted language service partner who can provide accurate translations of documents such as: Annual reports, income statements, banking documents, balance sheets, cash flow statements, auditor’s reports, government tax reports, financial reporting guidelines, business plans, and many more.