Aim of audit:
The aim of financial statement audit is to give a written opinion and a report by statutory advisors on the condition of financial statement. Statutory advisors also check if the statement properly and reliably displays material and financial condition as well as the financial outcome of the audited unit.
In accordance with the act on accountancy the financial statement consist of:
- Balance Sheet
- Profit and Loss Statement
- Additional notes (introduction to the financial statement, additional information and explanations)
- Cash Flow Statement (this part of financial statement is obligatorily drawn up only by those units which’s financial statement has to be audited and publicized)
- Statement of Changes in Capital (this part of financial statement is obligatorily drawn up only by those units which’s financial statement has to be audited and publicized)
Information resulting from financial statements is analyzed and used by various groups of stakeholders:
- Management/ management board/ supervisory board
- Investors (current shareholders, partners, members of cooperative etc. as well as potential investors who consider purchasing stocks/shares)
- Trade contractors
- Banks and other lenders
- Governmental and fiscal institutions
- Employees and their unions
The audit is conducted by a statutory auditor mainly for the owner of the unit. The work of statutory auditor, who is an independent expert, should confirm if the financial statement drawn up by accountancy department and approved by management was:
- drawn up on the base of correctly kept books of account
- drawn up in accordance with continuous accountancy rules as set by the Accounting act
- in accordance with standing regulations, status and agreement in terms of form and content
- displays reliably and clearly all information needed to form an opinion and with regard to report on activities of the unit if all information included in the statement is in accordance with information included in annual financial statement
When should financial statement be audited?
Every financial statement on request of the unit’s management board or owners (supervisory board) may be audited or checked by a statutory advisor. However, some companies are obliged by the act on accountancy to have their annual financial statements audited.
In accordance with the act on accountancy some financial statements are obliged to undergo an audit and be publicized. This rule applies to:
- capital group’s annual audit of consolidated accounts
- annual financial statement of banks and insurance systems
- annual financial statement of firms operating based on regulations on turnover of Securities and regulations on Investment Funds
- annual financial statement of firms operating based on regulations on organization and functioning of Pension Funds
- annual financial statement of joint-stock companies except for units which on the balance day were during organization
- annual financial statement of other firms which in the last
Fiscal Year, in which a financial statement has been drawn up, complied
with at least two of the following conditions:
- the average employment throughout the year, counted in full-time jobs, should equal at least 50
- the sum of balance’s assets at the end of Fiscal Year should amount to the equivalent of at least 2.500.000 euro in Polish currency
- the net income from the sale of commodities and products and financial operations throughout the Fiscal Year should amount to the equivalent of at least 5.000.000 euro in Polish currency
The audit also involves:
- financial statements of overtaken and newly created companies, carried out throughout the Fiscal Year in which there were any events
- annual combined financial statement of investment funds with distinguished sub-funds and annual individual financial statements
A statutory auditor who carries out the financial statement is chosen by the authorities that approve the financial statement of the firm, unless the status, contract or other enforcing rules of law determine different.
The client enters a contract with a statutory auditor for an audit, in time that allows the client to participate in stock-taking of significant property components.
Actions carried out by an auditor:
As a result of the audit carried out, statutory advisor ought to gather evidence enabling him voicing, in the opinion and the report, an appropriate view on an audited financial statement. While carrying out an audit we try to form the interaction with our clients so that they could perceive us as open-minded and friendly people who understand the complexity of processes which take place in their company. We are committed to consider honest exchange of opinions and mutual transfer of information. We respect the time of people who cooperate with us. Our aim is to satisfy the client respecting at the same time standing professional and ethical norms.
General actions of our auditors include:
Introductory actions (after having concluded the contract)
- Getting to know the firm (structure, type of activity, financial results, economic surrounding, etc.)
- Introductory recognition of the possibility of the company to continue to operate
- Introductory recognition of the accounting system, involving internal control.
- Introductory defining of risk factors.
Organizing the plan of the audit:
- Defining the procedure and the method of audit of different areas ?
- Defining the type, scope and time of consecutive actions
Introductory audit (before closing of the books):
- Analytical review and the audit of individual balances or groups of economic operations
- Receiving clarifications and/or possible correction or completion of document entries?
- Observation of stock-taking
- Confirmation of balances and significant items of assets and liabilities
- Possible correction of the plan of further audit
Fundamental audit(after closing of the books):
- Final analytical review and test for individual balances or groups of economic operations
- Audit of occurrences after the balance day ?
- Discussing possible corrections with the board of directors
- Verifying if the financial statement is in accordance with the data included in Report on Operations
- Preparing final documents (including the opinion and the report)
- An opinion
- A report from the audit
- A letter to management board
- A letter to supervisory board