Naletova I.A. Audit Audit of the financial condition of the enterprise. Audit of the financial condition of the enterprise Who is entitled to audit financial statements

Financial audit is a comprehensive check of the economic and financial condition of the organization, verification of the reliability of information in the financial statements of the organization, as well as analysis and assessment of the prospects for its development, which can be carried out both by specialists of the organization itself (internal audit) and by third-party audit companies commissioned by management ( independent audit).

In practice, financial audit is often viewed as a very narrow concept, usually including the classic statutory audit of financial financial statements.

The main purpose of an independent audit is to assess the correctness of maintaining accounting in the audited company, as well as verification of the reliability of financial statements.

During the audit financial activities organizations:

• financial risks (tax, legal, administrative, economic) are identified;
• recommendations are made to reduce them.

The task of conducting an audit is to analyze the profitability and efficiency of the main, financial and investment activities of the company. To accomplish this task, a detailed study, analysis and evaluation of the information presented in the financial statements of the organization is necessary.

Internal financial audit of the organization

In our country, internal audit of financial statements is given less attention than it deserves. Internal financial audit is a type of activity of an organization that, on the basis of internal documentation, controls the management and various areas financial activities of the company.

The internal financial audit is carried out by a special department that works as part of the audited company. Such a check is necessary for management to be able to study and analyze the real state of affairs in their organization. Based on the information obtained during the financial audit, management develops ways to improve the organization's performance. The activities of internal auditors are advisory in nature.

For an objective analysis of the financial and economic activities of the organization and obtaining an impartial report, it is better to use the services of third-party audit firms.

The significance of the audit report for the company

The best confirmation of the reliability and honesty of the company in the modern business world is the conclusion of an independent auditor on the reliability of financial and accounting statements. In addition, an audit report is necessary to confirm the company's image and business reputation when concluding contracts and agreements with partners or various credit institutions.

An auditor's report is a document intended for users of the accounting (financial) statements of audited entities, which contains the expressed opinion of an audit organization, an individual auditor on the reliability of the accounting (financial) statements of an audited entity (Article 6 of the Federal Law "On Auditing Activities" dated December 30, 2008 No. 307-FZ).

Based on the results of the audit report, the head of the organization decides on the need for specific actions. As a rule, after the measures taken, the tax authorities do not impose fines during scheduled inspections. Thus, companies manage to avoid significant financial losses.

Who is authorized to audit financial statements

Audit services can be carried out:

• audit organizations - commercial legal entities;
• Individual auditors are individual entrepreneurs with an auditor's qualification certificate.

At the same time, in order to engage in auditing, such companies and individual entrepreneurs must be members of one of the self-regulatory organizations of auditors. Auditing services can be provided from the date of entering information about the relevant legal entity or individual entrepreneur into the register of auditors and audit organizations of the self-regulatory organization of auditors.

Auditing activities are carried out in accordance with the International Standards on Auditing (ISA), which are mandatory for audit organizations, auditors, self-regulatory organizations of auditors and their employees.

Who is entitled to order a financial audit of an organization

The audit report is submitted by an audit organization, an individual auditor only to the person who has entered into an agreement for the provision of audit services - to the management (owners) of the company. Depending on the form of activity of the organization, these can be:

• participants of the meeting of shareholders;
• Board of Directors;
• members of a production cooperative;
• supervisory board;
• executive bodies.

An independent financial audit is necessary for the heads of organizations for an objective assessment of the effectiveness of financial activities and business.

If a company is subject to a mandatory audit of financial and accounting statements, it is its responsibility to obtain an audit opinion.

The criteria for a mandatory audit of financial statements are contained in Art. 5 of the Federal Law of December 30, 2008 No. 307-FZ "On Auditing".

In particular, organizations that require periodic mandatory financial audits:

• organizations that have the organizational and legal form of a joint-stock company;
• organizations that conduct credit or insurance activities;
• mutual insurance companies;
• commodity or stock exchanges;
• investment state off-budget funds;
• organizations in respect of which periodic mandatory financial audit and reporting to regulatory authorities are provided for by law;
• organizations that issue valuable papers.

The need for a financial audit

In addition to the mandatory audit of financial statements, in practice there are often situations in which a financial audit of a company is desirable:

• to assess the competence and performance of in-house accountants in terms of proper bookkeeping;
• in case of change of financial director, chief accountant or director of the organization;
• to check economic financial statements before submitting them to government agencies and the statistics department;
• in anticipation of a tax audit;
• if desired, reduce litigation risks;
• in the event of debts and high production costs;
• if management plans to sell or acquire a running business;
• before attracting additional third-party investment.

Composition and results of the financial audit of the organization

A company that has undertaken to conduct a financial audit provides the audited organization with the following services:

• a complete study of the structure of assets and liabilities of the audited company, income and expenses for each type and separately for each type of financial activity;
• analysis of financial ratios, valuations and recognition of liabilities and assets;
• examination of accounting policies, including imputations and estimates;
• identification of the elements underlying the company's financial results in recent years and having a significant impact on its financial results;
• analysis of the movement of financial resources in recent years, as well as factors that have a significant impact on it;
• development of comments on the forecasts of the company's management regarding the prospects for the development of its financial activities;
• correlation of these forecasts with the volume of sales and the general financial condition of the company.

According to the results of the financial audit of the organization's statements, its management receives:

• independent expert opinion on the solvency, profitability of the company, the turnover of its capital;
• a full report on all factors of interest to him (the value of the company's net assets, the state of receivables and payables, including loans and credits, long-term and short-term financial investments, transactions with related parties, unrecorded liabilities, sales volume and inventories, etc.) .

Thus, the audit of the financial activities of the company allows you to objectively assess the overall financial performance of the business, determine where and in what volumes the company's cash flows go, optimize financial activities, as well as assess the competence of the internal financial service, and eliminate shortcomings.

The procedure for auditing the financial activities of the company

When conducting a financial audit of an organization, the main stages can be distinguished:

• preliminary planning - getting to know the audited company, determining the scope and types of work, developing audit tasks, determining the cost of audit services, signing a contract;
• drawing up an audit plan, including the sequence and nature of work, developing an audit program;
• direct audit - analysis of accounting and financial statements, checking them for compliance with the norms and standards of legislation with the distribution of responsibilities between specialist auditors according to the approved program;
• drawing up an audit report - a document containing complete data on all violations, deviations, omissions, errors and shortcomings, tax risks discovered during the financial audit, as well as conclusions and recommendations of auditors for their elimination and reduction;
• issuance of an auditor's report - a formal assessment of the reliability of information presented in the company's financial statements.

The auditor's report is signed by the head of the audit organization or a person authorized by him who has an auditor's qualification certificate; individual auditor.

The definition of financial audit means a comprehensive check of the economic condition of the organization, as well as an assessment of the prospects for its development.

In modern domestic practice, financial audit is more often seen as a very narrow concept, usually including only the classic audit of financial statements. Also close to the financial audit concept is an investment audit - an expert opinion on the target and maximum effective application investment resources of the company.

The purpose of such an independent audit is to assess the correctness of accounting in the audited company, as well as to verify the reliability of financial statements. In addition, during the audit of the financial and economic activities of the organization, financial risks (tax, legal, administrative, economic) are identified and recommendations are issued to reduce them.

The strategic task of conducting an audit is to analyze the profitability and performance of the company in the light of its core, financial and investment activities. This task is achieved through a detailed analysis of the information that is presented in the organization's financial statements.

A general audit of the financial sphere of activity is carried out either at the initiative of the owner of the company, or for the purpose of an annual audit of the organization's reporting, the need for which is enshrined in law.

Who is this service for?

Financial audit services are primarily needed by managers of enterprises and organizations that seek to objectively evaluate the performance of their financial structures.

An audit of the financial condition will give an independent opinion on the solvency and profitability of the company, the turnover of its capital, etc. Based on the results of the audit, the manager will be able to receive a full report on all the factors of interest to him. In addition, the audit report must contain recommendations for eliminating the identified shortcomings and optimizing the financial activities of the organization.

According to experts, an independent financial audit is a great opportunity to take an objective look at the company's activities. The audit firm is designed to help the owner of the enterprise or other interested parties to impartially assess the overall financial performance of the business. In this case, this type of audit is the main tool and an integral element of the overall financial analysis.

In what cases will a financial audit be not only useful, but also necessary?

• Such independent reviews should be carried out periodically to superficially assess the competence and performance of in-house accountants in terms of proper bookkeeping.
• A financial audit of a company is carried out in the event of a change in the financial director, chief accountant or director of the enterprise.
• An audit of the financial condition of a company is performed to verify economic reporting before submitting it to government agencies and the statistics department.

What does a financial audit include?

• a comprehensive assessment of the financial condition of the enterprise;
• studying the efficiency of the company, as well as the financial results of its activities;
• detailed analysis of the used financial and economic strategies;
• study of stability, solvency and liquidity of the enterprise;
• assessment of the prospects for increasing business activity, as well as the effectiveness of the economic activity of the organization;
• recommendations for optimizing the financial strategy for a particular enterprise.

What should a firm that has committed itself to conducting a financial audit do?

• conduct a complete study of the structure of assets and liabilities of the audited company, income and expenses for each type and separately for each type of activity;
• consider financial ratios, the basis of valuation and the recognition of liabilities and assets,
• examine the impact of individual accounting policy factors, including imputations and estimates;
• identify and comment on the elements that underlie the company's reported business results in recent years and have a significant impact on its financial results;
• explore the nature of the movement of funds in recent times, as well as those factors that have a significant impact on it;
• give comments on the forecasts of the company's management regarding the prospects for the development of the commercial activities of the enterprise;
• pay special attention to the correlation of these forecasts with the current sales volume and the overall financial condition of the company.

What are the main numerical indicators that play an important role in the course of a financial audit?

• Net income and net assets
• Turnover and profitability of the company
• Accounting for expenses and income, as well as the reliability of explanations to them
• All fixed assets of the enterprise, material and commodity stocks
• Accounts receivable and financial investments of the enterprise
• The presence of accounts payable on loans, credits or settlements with the company's suppliers
• Unrecorded liabilities
• The correctness of the organization's balance sheet
• Transactions with related parties
• Timeliness and reliability of the inventory of assets and liabilities of the enterprise, etc.
  

Which organizations require periodic mandatory independent audits?

Subject to mandatory financial audit:

• Enterprises that are built according to the organizational and legal form of an open joint stock company
• Enterprises that conduct credit or insurance activities
• Mutual insurance companies
• Commodity or stock exchanges
• Investment state non-budgetary funds
• Funds, the source of formation of the financial base of which is voluntary contributions of legal entities and individuals
• Organizations that are unitary state or municipal enterprises whose activities are based on the right of economic management
• Enterprises in respect of which periodic mandatory financial audit and reporting to regulatory authorities are provided for by law
• Companies that issue securities
• Organizations that privatize communal or state property
  

What gives an independent audit of the company's financial activities?

Based on the results of the financial audit, the customer is provided with:

1. An auditor's report that contains officially confirmed data on the reliability of the financial or accounting statements of the audited company provided for analysis. In addition, the auditor's report should include a reliable analysis of the financial position and performance of the organization for the period under study.
2. A written report that contains complete information about all violations and shortcomings found as a result of the financial audit. All found errors and violations must be classified in full accordance with the established rules of the current legislation. In addition to the list of identified shortcomings, this document should also contain recommendations for eliminating financial errors.
3. A separate document drawn up on the basis of the results of the financial audit should contain recommendations aimed at improving the financial condition of the enterprise, as well as improving the efficiency of the company's financial management system.

In the modern business world, the conclusion of an independent auditor on the reliability of accounting and financial statements is the best confirmation of the reliability and honesty of the company. In addition, an audit report will be necessary to confirm the image and business reputation of the company when concluding contracts and agreements with partners or various credit institutions.

Applying for a financial audit to our company, you guarantee yourself the services of top-class specialists, a quick and professional audit, as well as the most complete and objective information in the final report.

Lugansk National Agrarian University

Department of Accounting and Audit

COURSE WORK

on the subject "AUDIT" on the topic:

"Audit of the financial condition of the enterprise"

Completed:
student
Faculty of Economics
groups

Checked:
Skorobogatova
Elena Valerievna

Lugansk
2004

Content:

Introduction
1. Theoretical foundations and regulatory framework
audit activity
2. General principles of the organization of the audit
2.1. The essence, task and functions of audit in a market
economy;
2.2. Organization and planning of audit activities;
2.3. The sequence of the audit and its execution
results.
3. Methodology for auditing the financial condition of an enterprise
3.1. Tasks, sequence of the audit and its information
security;
3.2. Express audit of the balance sheet;
3.3. Audit of the financial and property condition;
3.4. solvency audit;
3.5. Balance liquidity analysis.
4. Assessment of the state of on-farm control and compliance
enterprise accounting policy
findings
List of used literature.
Appendix
Audit Work Program

Introduction

The formation of audit activity is connected with the formation of market relations, the privatization of state property, the reform and development of various forms of ownership, including private ownership, and the provision of independence in entrepreneurial activity to business entities. In this regard, there is a growing need for the reliability of accounting and reporting data for a wide range of external and internal consumers of information on the business activity of enterprises in order to prevent risk when investing their capital and control their effective use.
Ukraine's transition to market relations predetermines the need to create economic institutions that regulate the relationship between different business entities. The leading place in this process can be taken by the institution of audit. This is especially important for agriculture, where fundamental changes have taken place.
The situation that has developed in agriculture requires such an organization of independent control that would assist in the validity of managerial decision-making based on accounting for identified violations in accounting, financial and tax reporting.
In this regard, an audit at enterprises should be organized and conducted according to such methodological approaches that would ensure the reliability of checks of the compliance with the reflection in accounting registers and reporting of fixed assets, fuels and lubricants, spare parts, raw materials and other materials for the audit period, as well as the reliability product costing and evaluation during processing and sale; determination of financial results; drawing up accurate, complete and timely reporting in the accounting and reporting of economic facts, obtain evidence to confirm it and convey this truth through an audit conclusion to information users.
In the situation that has developed at enterprises and the Ukrainian economy as a whole, the most topical issue is an audit of the financial condition of the enterprise. Since conducting this analysis can reveal the strengths and weaknesses of the enterprise and suggest the choice of making the most rational management decision. This will help save the enterprise from bankruptcy, increase the independence, liquidity of the enterprise, etc. depending on the current economic situation.

1. Theoretical foundations and regulatory framework for the regulation of audit activities

According to the Law of Ukraine "On Auditing Activities" dated April 22, 1993, an audit is a check of public accounting, accounting, primary documents and other information regarding the financial and economic activities of business entities in order to determine the reliability of their reporting, accounting, its completeness and compliance with the current legislation and established standards.
The concept of audit activity is broader and provides for the practical implementation of both audit and other audit services in the form of related expertise, consultations on accounting, reporting, taxation, analysis of financial and economic activities and other types of economic and legal support for entrepreneurial activities of individuals. and legal entities.
Auditing activity began to develop in Ukraine with the transition to market relations, which were due to such circumstances:
- the division of accounting into tax and accounting, constant changes in legislation have created a demand for audit and such audit services as providing advice on accounting, law, taxation, direct accounting and reporting, etc.;
- foreign investors of common enterprises required confirmation of the reliability of financial statements by the auditor;
- creation and development of joint-stock companies, the owners of which are not confident in the reliability of financial statements, are not aware of the accounting system, the result of which are these indicators.
The subject of audit activity is the process of expanded reproduction of a socially necessary product and compliance with its economic and legal regulation in a market economy.
The objects of the audit are accounting, reporting reliability, financial stability, solvency, enterprise management system, quality of work of economic and technical services, taxation, planning, regulation, stimulation, internal control, organization and technology of production, business processes, design and estimate documentation. , executive discipline, etc.
Audit methodologies are a set of ways to study the legality, expediency and effectiveness for assessing the activities of an enterprise. Methodological methods of audit are divided into three groups:
1 Methods of scientific thinking (analysis, synthesis, induction, deduction, observation, comparison).
2. Techniques of the actual audit (inventory, examination, observation, laboratory tests, examinations (expert assessments), control measurements of work performed, control launch of raw materials and materials into production).
3. Techniques of documentary audit (analogy, modeling, cross-checking of documents, logical understanding of operations, reverse counting method, coefficient method of indirect distribution of used materials, acceptance of special calculations, examinations (peer reviews) of documents, balance method, statistical methods (grouping, absolute, relative and average, values, variance, standard deviation, coefficient of variation, fluctuation amplitude, index method, correlation), economic and mathematical method (mathematical model, network planning and management system), heuristic methods, balance reality assessment, logical verification of machinograms , methods of economic analysis, program control of information entered into the computer, duplication.
Methods of actual and documentary audit are interconnected and interdependent. This is revealed in the fact that, with any acceptance of the actual audit, the verification should end when it is supplemented with the necessary information from the relevant economic and technical documentation. The same state with the methods of documentary audit, in which the necessary additional data on the actual presence of valuables, the integrity of property, the reality of balance sheet items, etc.
The auditor evaluates the financial information intended for presentation to users from the standpoint of objectivity and relevance, the sufficient level of which is determined by certain regulatory documents (standards and norms of professional organizations or current legislation).
The International Federation of Accountants, together with the International Committee on Auditing Practices, has developed auditing standards in the amount of 29 basic standards and 4 related works.
The Audit Chamber of Ukraine (ACU) is an independent independent body, the purpose of which is to promote the development, improvement and unification of the audit business in the country.
The powers of the Audit Chamber of Ukraine are determined by the Law of Ukraine "On Auditing" and the Charter of the APU adopted on October 28, 1993.
In order to regulate the rules and procedures for conducting audits and performing audit services, the APA has developed national standards (norms) for auditing. They are based on the legislation of Ukraine on audit activity and international audit standards.
Auditing standards formulate uniform basic requirements that define the regulatory requirements for the quality and reliability of the audit and provide a certain level of assurance of the results of the audit if they are observed.
Auditing standards are the basis for proving the quality of the audit and determining the degree of responsibility of auditors.
Auditing standards define: a general approach to the audit; the scope of the audit; types of auditors' reports; the issue of audit methodology, the basic principles that auditors must adhere to, and other issues.
The meaning of the standards is that they:
- ensure the high quality of the audit;
- assist in the introduction of new scientific achievements into audit practice;
— help users understand the audit process;
- create a public image of the profession;
- provide a link between the individual elements of the audit process.

2. General principles of the organization of the audit

2.1. Essence, task and functions of audit in a market economy

According to the Law of Ukraine "On Auditing", the concept of "audit activity" includes the organizational and methodological support of the audit, the practical implementation of audits (audit) and the provision of other audit services. Audit services can be provided in the form of audits (audits) and related expertise, consultations on accounting, reporting, taxation, analysis of financial and economic activities and other types of economic and legal support for entrepreneurial activities of individuals and legal entities.
Along with these types of services, audit firms in Ukraine carry out work on the privatization of property of state-owned enterprises, commercialization of trade, corporatization of enterprises, prepare materials for consideration of client cases in arbitration courts. Thanks to the audit mediation contacts are made.
The need for an audit is determined by the need of users of information about the real financial condition of a business entity. The users of this information may be:
- representatives of public authorities authorized on the basis of the laws of Ukraine;
- owners, founders of the managing entity;
- other legal entities and individuals who have a material interest in the results of the economic and financial activities of a business entity (creditors, investors, suppliers and other persons).
It must also be indicated that the users of this information have the right, in accordance with Art. 9 of the Law of Ukraine "On Auditing" act as customers for auditing and other audit services, determine the scope and direction of audits within the limits of authority granted by law, constituent documents or separate agreements.
The objectivity of the audit conclusion is a prerequisite and. one of the main specific features. This condition is assumed by the independence of the audit and is dictated by the needs of users.
Confidence in the reliability and completeness of the information provided by the auditor to users is not absolute. An audit provides only a rough, although fairly high, degree of this assurance.
The auditor's conclusion cannot be evidence of the absolute accuracy of other information and a guarantee of its correctness, it can only confirm the reliability of the information. An audit is a process of reducing the level of information risk for users of financial statements.
The auditor does not approve the reports of business entities and is not responsible for the reporting itself. He only expresses his opinion regarding financial statements. Responsibility for financial reporting lies with the management of the entity being audited. The audit does not release the entity's management from responsibility.
The objective of an audit of financial statements is to provide the auditor with a conclusion about whether the financial statements, in all material respects, comply with the instructions that govern the preparation and presentation of financial statements. Based on the results of the audit, an audit conclusion is drawn up on the real financial condition of the business entity. So, the purpose of the audit is to draw up an audit conclusion on the financial condition of the entity being audited. The main tasks of the audit are the collection and processing of reliable information about the economic and financial activities of a business entity and the formation of audit conclusions on this basis.
In addition, the audit must adequately reflect all aspects of the activities of the entity being audited. In order to draw up a reliable audit conclusion, the auditor must obtain an unconditional guarantee that the information that is placed in the accounting documentation and primary documents is sufficient and reliable.

2.2. Organization and planning of audit activities

The organization and planning of the audit should be based on knowledge of the client's activities. They collect information about clients regarding their business reputation, financial condition, relations with the previous audit firm, and, if possible, establish contacts with law enforcement agencies, banks and enterprises with which the client has business relations.
It is important to study the characteristics of the client's area, legal status and form of management, since this is due to differences in the legislation that regulates production and financial activities. They collect data on the size of the enterprise, specialization, level of profitability, form of accounting, etc. Based on the order for the type of audit services and analysis of the information collected, they select specific performers, form groups of auditors, taking into account their specialization and the most effective use at the relevant facilities. The plan provides for instructing auditors on the performance of their duties, providing all the necessary information about the client.
Based on the analysis of the data of the previous audit report, acts and certificates of inspections of control and audit bodies and other collected information, risk zones and confidence zones are determined in order to direct work to the most important objects and areas. In the plan, a list of objects of verification is noted. At the same time, they determine the development of audit procedures, tests, programs for specific audit objects, the use of computers, inventory objects and timing. The plan provides for the timing of the audit, the amount of the fee, the form of settlement with the client.
To implement the plan, an audit program is drawn up (see Appendix). Programs can be typical and individual with varying degrees of detail on the objects and areas of audit.

2.3. The sequence of the audit and the presentation of its results

The audit process is important to organize in a certain order of work. It is advisable to carry out the audit in stages, in this sequence.
Stages (stages) of the audit:
1. Prior survey of the client's activities.
2. Drawing up an audit plan.
3. Checking the accounting and internal control system.
4. Analytical verification of financial information.
5. Selective survey - obtaining audit certificates.
6. Final review of financial statements.
7. Preparation of an audit report.
After appointing an auditor to audit a particular enterprise, he carries out a preliminary survey of the client's activities. It is necessary to learn the reporting of the enterprise for the previous year, analyze the changes in the current year in comparison with the past in terms of gross output, its cost and other indicators. At this stage in in general terms the state of accounting and on-farm control, changes in accounting policies in comparison with the previous year are being studied. It is also important to familiarize yourself with the acts of inspections of the tax inspectorate, the Pension Fund and other control and audit bodies.
All this makes it possible to form a general imagination about the state of affairs of the client, accounting and control, determine the approximate scope of work and the main directions and objects of the audit, risk zones, and outline appropriate verification methods.
After that, an audit contract is drawn up, and the auditor continues to collect and study additional information about the client enterprise and draws up an Audit plan.
Audit planning is necessary for a clear definition of audit directions, objects and methods of verification.
After drawing up the plan, the auditor conducts an examination of the accounting and internal control system. He must learn the accounting system and the reflection of transactions in the accounting registers at the enterprise, evaluate their suitability for the preparation of financial statements, as well as to determine how to conduct an audit.
The auditor explores the process of reflecting individual transactions, starting with primary documents and ending with reporting; checks the availability of all necessary registers and the procedure for their maintenance, performs arithmetic checks of turnovers and balances on accounts and the results of reports and individual documents; establishes the correctness of the execution of primary documents, the use of the chart of accounts, including the introduced new accounts.
Particular attention is paid to whether new provisions and changes regarding existing regulations are taken into account when keeping records.
An internal control survey should be carried out in order to determine the degree of confidence in the information in the financial statements and the actual state of affairs in the enterprise.
The auditor must establish to what extent the control provides: the effective operation of the enterprise, the preservation of material resources, the timely and complete display of operations in the accounting.
It is necessary to check the availability of a plan for conducting inventories and its implementation, conducting control measurements of work, the effectiveness of the organization of internal control, including the work of the audit commission of the enterprise, managers at all workplaces (foremen, technologists, etc.), competence of supervisory personnel.
The weakness of internal control is indicated by: the absence of separate registries, falsification of documents, unauthorized transactions, the presence of overdue debts, fines, penalties, large cash payments, significant payments to consultants and intermediaries for dubious services, the presence of hid in law enforcement agencies, etc.
Analytical verification of financial information is carried out to determine the trends of production processes, the relationship of economic indicators and the identification of so-called unusual deviations, the calculation of economic ratios to assess the financial condition and the preparation of an overview of financial information. Analytical procedures include: analysis of indicators in dynamics, in comparison with the plan (budget), with the same!! indicators of another enterprise that operates in similar conditions. Structural analysis (determination of the share of individual items in the total amount) is important, which makes it possible to single out the most significant objects of control.
When conducting an analysis, a variety of techniques can be used, from a simple comparison of indicators to economic and statistical methods.
In cases where unusual deviations are established as a result of the analysis, it is necessary to investigate them in detail, interview the personnel of the enterprise about the reasons, consider the need for additional procedures (inventory, counter checks of documents, arithmetic recalculations, etc.).
Analytical procedures that are used in a general financial review should help the auditor to conclude that the financial information is consistent with the actual state of affairs in the enterprise, as well as to confirm the conclusions made during the audit on individual elements of financial information.
A sample survey, that is, carrying out independent audit procedures, is carried out to obtain sufficient audit evidence (evidence), on the basis of which an audit conclusion is drawn up on the reliability of financial statements. This stage is the most responsible and essential. Therefore, here it is necessary to clearly define the objects of audits, the volume of the audit sample, the source of information, the techniques and methods of audit procedures, which will be discussed further.
The review of financial information is carried out at the final stage of the audit on all collected facts and audit materials. A comprehensive review makes it possible to determine, based on the principle of materiality, whether the financial statements are prepared in accordance with the current procedure, whether they correspond to the actual state of affairs at the enterprise, whether all issues in the statements are properly disclosed, whether the financial statements meet the requirements of the law and other regulations. The conclusions drawn on the basis of many tests related to the study of financial statements allow the formulation of an audit conclusion.
The preparation of an audit report is the ultimate goal of the auditor, which is an audit judgment on the reliability of financial information, as well as the development of recommendations, the provision of advice on correcting errors and eliminating identified deficiencies. The procedure for compiling the audit report is set out below.

3. Methodology for auditing the financial condition of an enterprise

3.1. Tasks, sequence of the audit and its information support

An assessment of the financial condition is the consideration of each indicator obtained as a result of financial analysis, in terms of whether its actual level is normal for a given enterprise, the identification of factors that influenced the value of the indicator and the determination of the required value of the indicator for the future and ways to achieve it.
Assessment of the financial condition of enterprises is based on the analysis of financial reports. The main source of information in the analysis of the financial condition is the standard forms of the annual financial statements of the enterprise, in particular: Balance sheet of the enterprise (form No. 1), Statement of financial results (form No. 2), Statement of cash flows (form No. 3), Statement of equity (form No. 4), Notes to the annual financial statements (form No. 5), sometimes (for example, when calculating the indicators of the market activity of an enterprise, to clarify some liquidity indicators), statistical reporting data, operational accounting information, General ledger, Turnover balance sheets, warrant journals, tax invoices and inventory materials.
Analysis of the financial condition of the enterprise is carried out in the following areas of assessment:
property status of the enterprise;
liquidity of assets and solvency of the enterprise;
indicators of financial independence and capital structure;
indicators of profitability and profitability of the enterprise;
indicators of business activity;
market activity.
The methodology for verifying the compliance of the presented financial statements with regulatory requirements provides for such stages.
1. Establishment of the reporting period.
2. Checking the composition of the financial statements.
3. Evaluation of criteria for financial reporting items.
4. Evaluation of the qualitative characteristics of financial statements.
5. Evaluation of reporting principles.
The auditor establishes compliance with the general requirements for the content of the Notes.
In the audit process, the auditor should be guided by P(S)BU regarding the determination of changes in accounting policies.
Based on the procedures performed, the auditor concludes that the financial statements comply with the requirements for providing users with complete, truthful and unbiased information about the financial condition, performance and cash flow of the enterprise.

3.2. Express audit of the balance

According to P (s) BU 2 "Balance" is a report on the financial condition of an enterprise, which reflects its assets and liabilities.
Express audit of the balance sheet - promptly received information on the financial condition of the enterprise and conclusions in a quick confirmation of the reliability of the reflection of data on financial and economic operations in the balance sheet.
Sources of verification: Balance sheet (Form No. 1), General Ledger, turnover balance sheets, warrant journals, inventory materials, tax returns, etc.
An audit of the correctness of the balance sheet begins with a compliance check:
1. Balance sheet data at the beginning of the year with balance sheet data at the end of the previous year. When clarifying discrepancies between the opening and closing balance sheets, clarifications are required from the chief accountant.
2. Data of the final balance with the balance of the accounts of the General Ledger at the end of the year and order journals, the correctness of arithmetic calculations.
3. Comparability of balance sheet items at the beginning and end of the year.
4. Consistency and identity of the amounts of balance sheet items for settlements with financial authorities and the balance sheet at the enterprise and financial institutions.
5. Interconnection of balance sheet indicators and other forms of reporting.
The correctness of the reflection of assets and liabilities is checked.
The main objects of the audit of the company's assets are intangible assets, construction in progress, fixed assets, long-term financial investments, long-term receivables, deferred tax assets, other irreversible assets, inventories, settlement transactions, current financial investments, cash and cash equivalents.
The auditor can confirm the correctness of the reflection in the balance sheet of each item.
When checking the reliability of the intangible assets displayed in the Balance, the auditor can establish: the correctness of assigning assets to them, determining the initial, residual value and depreciation, as well as the correspondence of data on the Balance items to the balance on the General Ledger account.
Under the article "Depreciation", the auditor can establish the compliance of the Balance data with the credit balance of sub-account 133 "Depreciation of intangible assets" in the General Ledger.
Under the article "Construction in progress", the auditor establishes the correctness of displaying the value of capital investments in progress in construction, creation, manufacture, reconstruction, modernization, acquisition of irreversible assets (including irreversible tangible assets intended to replace existing ones and equipment for installation), which are carried out by the enterprise, and also advance payments to finance capital construction.
The task of the auditor is to establish the compliance of the data of the Balance article with the debit balance of account 15 "Capital investments" of the General Ledger.
Similarly to intangible assets, fixed assets are checked in the following areas: the correctness of classifying assets as fixed assets, determining their initial, residual value and demolition, and matching the balance sheet and general ledger data.
The auditor can establish the correspondence of the data on the initial cost of fixed assets given in the Balance, the debit balance of accounts 10 "Fixed assets" and 11 "Other non-current tangible assets" in the General Ledger.
When checking the depreciation of fixed assets displayed in the Balance sheet, the auditor must find out the correctness of the depreciation object. The object of depreciation is the cost of fixed assets (except for the cost of land and capital investments in progress).
Verification of the correctness of long-term financial investments reflected in the Balance comes down to establishing the correctness of the definition of financial investments and their valuation, compliance with the classification of long-term investments, which are taken into account according to the method of participation in the capital of other enterprises, and other long-term financial investments, valuation of financial investments as of the date of the Balance.
The correctness of attributing amounts to deferred tax assets and reflecting the calculation of the amount of income tax is checked for accounting and tax accounting. The auditor should pay special attention to the correct display of the amount of deferred tax liabilities, which is subject to reimbursement in the following periods due to the difference between the tax base for accounting and tax accounting.
Under the item "Other irreversible assets", the auditor checks the correctness of their reflection as such that they were not included in the previous items of "Irreversible assets", except for goodwill that arise on acquisition.
The auditor must establish the correctness of classifying assets as current assets and their evaluation.
When checking the correctness of the valuation of reserves, the auditor can make sure that it is carried out op the smallest of two values: cost (original cost) or net realizable value, as well as their validity.
When checking production stocks, the auditor finds out the correctness of assigning assets to the composition of production stocks, their evaluation and compliance with the balance sheet data on the accounts of the General Ledger.
The auditor must establish the correspondence of the Balance sheet data for the item "Animals for growing and fattening" with the debit balance on account 21 "Animals for growing and fattening" in the General Ledger.
Checking the correctness of the reflection in the Balance of work in progress, the auditor should find out that this item reflects the costs of work in progress and work in progress (services), as well as the cost of semi-finished products of own production and gross debt of customers under construction contracts.
The task of the auditor is to establish the conformity of the reflected value of finished products in the Balance sheet with the debit balance in the General Ledger for accounts 26 "Finished products" and 27 "Agricultural products".
The auditor must establish the correspondence of the data on the cost of goods in the Balance to the data on the amount of the rolled-up debit balance in the General Ledger for all sub-accounts of account 28 "Goods".
The auditor can establish the correspondence of the amount of bills of exchange received, reflected in the Balance, to the debit balance in the General Ledger of account 34 "Short-term bills received".
When checking the reliability of the reflection in the Balance of receivables for goods, works, services, the auditor finds out the reflection in this article of the debt of buyers or customers for the products, goods, works or services provided to them (except for debt secured by bills of exchange).
Checking accounts receivable for settlements includes determining the correctness of its reflection in the Balance sheet in the following areas: with the budget, for advances issued, from accrued income, from internal settlements.
For settlements with the budget, it is necessary to reflect the receivables of financial and tax authorities, as well as prepayment of taxes, fees and other payments to the budget. The auditor must establish the correspondence of the Balance data for the article "Accounts receivable for settlements with the budget" to the debit balance of account 64 "Calculations for taxes and payments" in the General Ledger.
Under the article "Accounts receivable for advances issued" the auditor finds out the correctness of the reflection of the amount of advances, and provided to other enterprises on account of future payments.
The auditor must establish that the receivables for accrued income, reflected in the Balance, correspond to the debit balance on sub-account 373 "Calculations for accrued income" in the General Ledger.
The line "Accounts receivable for internal settlements" may reflect the debt for intradepartmental and intracompany settlements and receivables from related parties.
Under the item "Other current accounts receivable" the auditor finds out that the reflected debt of debtors, which cannot be included in other items of receivables and is reflected in current assets.
When checking the "Current financial investments", the auditor establishes the correctness of the reflection in the Balance of investments of their composition, their assessment, the correspondence of the balance data of the balance on the accounts in the General Ledger.
When checking the correctness of reflection in the Balance Money and their equivalents, the auditor first determines the correctness of assigning assets to them, as well as the correspondence of the balance sheet data to the balances on the accounts in the General Ledger.
When checking the correctness of the reflection in the Balance of other current assets, the auditor must find out that this article reflects the amounts of current assets that cannot be attributed to the articles of section I of the Balance "Current assets".
When checking the correctness of the display in the Balance of the costs of future periods, the auditor must find out that this article reflects the costs that occurred during the current or previous reporting periods, but relate to the following reporting periods, and also establish the conformity of the Balance data under the item "Deferred costs " and on account 39 "Deferred costs" in the General Ledger.
After checking the compliance of the asset items of the balance sheet, the auditor checks the correctness by displaying the balances on the accounts in the liabilities side of the balance sheet.
Checking the correctness of the reflection of data in section I "Equity" refers to authorized, share, additionally invested and other additional capital.
When checking the data reflected in the articles of the authorized capital, the auditor confirms the correctness of the total value of assets recorded in the constituent documents, which are the contribution of the owners (participants) to this capital of the enterprise.
The check of share capital provides that the value of share capital reflected in the Balance sheet must correspond to the data of the credit balance of account 41 "Share capital" in the General Ledger.
Checking the additional invested capital consists in clarifying the correctness of the reflection in this article by joint-stock companies of the amount of share premium received as a result of the sale of their own shares.
Checking the reserve capital is reduced to clarifying the reflection in this article of the amount of reserves created in accordance with the current legislation or constituent documents at the expense of retained earnings of the enterprise. The task of the auditor is to establish the correspondence of the value of the reserve capital, reflected in the Balance, to the credit balance on account 43 "Reserve capital" in the General Ledger.
The correctness of reflection in the Balance of retained earnings (uncovered loss) the auditor checks in accordance with P(S)BU 2 "Balance".
Checking the unpaid capital provides for establishing the compliance of the amount reflected in the Balance with the actual debt of the owners (participants) for contributions to the authorized capital, that is, the correspondence of the amount of unpaid capital displayed in the Balance to the credit balance on account 46 "Unpaid Capital" in the General Ledger.
Verification of the withdrawn capital consists in establishing the correctness of the reflection by economic companies of the actual cost of shares of their own issue or particles redeemed by the company from its participants. The auditor must establish the correspondence of the amount of withdrawn capital, displayed in the Balance, to the credit balance on account 45 "Withdrawn capital" in the General Ledger.
etc.................

accounting financial audit

Important in auditing is the study and evaluation of the financial condition and solvency of the economic entity. When conducting a mandatory audit of financial statements, an audit firm is obliged to check its financial condition and assess solvency, arguing with a number of indicators confirming the auditor's conclusions.

The information obtained in the course of the study is important both for the heads of the audited entity and for third parties who will use the audit report.

When conducting an audit of the financial condition, it is necessary to identify signs of the possibility of terminating the activities of the enterprise and determine whether the entity becomes a potential bankrupt and whether it will not become one within three months after the audit.

Analysis and audit of the financial condition and solvency should also be carried out in the process of internal audit in order to develop tactics for specialists.

The financial condition of an enterprise is its assets and liabilities, reflecting the availability and placement of resources on a certain date.

The main sources of information for auditing the financial condition of an enterprise are balance sheet enterprises (f. No. 1 of annual and quarterly reporting). Its importance in this is so great that the analysis of the financial condition is often called the analysis of the balance sheet. Together with the balance sheet, the source of data for the audit is the following annual reporting: a report on financial results and their use (Form No. 2 of annual and quarterly reporting); report on the financial and property condition of the enterprise (form No. 3). An analysis of the financial condition, which is based on financial statements, is carried out mainly by an external audit, i.e. specialized audit firms, owners or government agencies.

Accounting reporting forms on the activities of the enterprise allow external users to unbiasedly assess the financial condition of the enterprise even without using information that is a commercial secret.

An external audit of the financial condition of an enterprise may resort to research, the results of which are important not only for assessing potential partners of a particular enterprise, but also for other users of reporting. It is not all the same to the enterprise, according to what indicators possible contractors, shareholders, creditors will evaluate its financial condition. Therefore, the relationship between internal and external audit is necessary, and this is achieved with the help of specific methods and standards.

Audit of the financial condition of the enterprise includes:

• -general assessment of the financial condition and its change for the reporting period;
• -analysis of the financial stability of the enterprise, liquidity of the enterprise (balance sheet), coefficients of financial mobility.

An audit of the financial condition begins with determining the solvency of the enterprise. A solvent company is one whose current assets (inventory, cash, receivables and other assets) are greater than or equal to its external debt (liabilities). The external debt of the enterprise is determined according to the data of sections II and III of the liabilities side of the balance sheet. It includes short-term, medium-term and long-term loans, as well as accounts payable.

Comparing current assets with external liabilities, the auditor must take into account that the presence of stocks at the enterprise (especially state-owned) does not determine the real solvency, because in a market economy, stocks of work in progress, finished products and other inventory items in the event of bankruptcy of the enterprise may not be realizable for repayment of external.

Marketable assets include cash and accounts receivable and, to a certain extent (except for surpluses and stale inventories), inventories. Therefore, it is necessary to make an updated calculation of solvency, i.e. to determine the correspondence of fast-moving assets to external debt.

The auditor establishes an increase or decrease in the level of solvency of the enterprise by changing the indicator of working capital (working capital), which he defines as the difference between all current assets and short-term debt.

Working capital consists of those types of property that are completely located in the enterprise during one financial year and carry out a full turnover or several turnovers. The sources of its formation are: an increase in net income, long-term liabilities, share capital, etc. It must be taken into account that the most reliable partner is an enterprise with big size working capital, as it can mark on its obligations, increase the scale of its activities. The benchmark for optimizing the size of working capital is its amount, which is equal to half of short-term liabilities. Attraction of borrowed funds for the implementation of economic activities of the enterprise may have different efficiency, which depends on the rational formation of the structure of sources of funds used.

Market economic conditions force enterprises to urgently pay off short-term debt at any time. The ability of an enterprise to pay off term liabilities is determined by an indicator that characterizes the ratio of working capital to short-term liabilities. This ratio must be equal to one. Both low and high ratios are unfavorable.

Balance liquidity and relative indicators (financial ratios) characterize the external manifestation of the financial condition, due to its essence. Deepening the analysis based on accounting data contributes to solving the problems of internal audit. Thus, the study of financial stability factors necessitates an internal audit of inventories and expenses, and a refinement of the balance sheet liquidity assessment is carried out by an internal audit using an analysis of receivables and payables.

Liquidity is the ability of working capital to turn into cash, necessary for normal financial and economic activities. Auditors present their opinions to banks, suppliers, shareholders and other customers. Liquidity is determined by the ratio of all current assets to short-term liabilities. It should be noted that when the ratio of current assets to short-term debt is less than one, this means that there is nothing to pay for external obligations. In cases where current assets are equal to short-term liabilities, i.e. 1:1 ratio, the entrepreneur does not have a free choice of solution. If the ratio is high, the company has a large amount of free funds, uses expensive assets, i.e. profit from current assets is higher than interest rates for borrowed funds.

The auditor determines the liquidity of the enterprise based on the total amount of current assets. However, extraordinary circumstances can also affect the liquidity of an enterprise. In such cases, the auditor must calculate the liquidity ratio by maturity, which will determine whether the company will be able to return short-term debts. In this case, the ratio of fast-moving assets of cash, receivables and short-term liabilities is used.

The rational formation of sources of funds by the auditor is determined by their structure. The auditor should pay the main attention to own means (own capital).

The assessment of the structure of sources of funds, which the auditor has to give to banks, creditors, concerns the change in the share of own funds in the total amount of sources of funds in terms of financial risk when concluding agreements and contracts. The risk increases when the share of own funds (capital) decreases.

The auditor, after studying the structure of the sources of funds of the enterprise, provides information to banks, creditors on the expansion or curtailment of the enterprise's activities. A decrease in short-term loans and an increase in equity may be evidence of the winding down of an enterprise. However, it is impossible to come to such a conclusion at the same time, since part of these funds may be under the influence of other factors - interest rates for loans and dividends. The reference point for the auditor's conclusion about the expansion or curtailment of the enterprise's activities may be retained earnings (in the balance sheet, the difference between the amount of balance sheet profit and the use of profit - section 1 of the asset and liability).

As already noted, the optimal structure of finance is considered to be their formation at the expense of own funds only in terms of fixed capital (fixed assets). For this purpose, the investment indicator (the ratio of own funds to fixed capital) is calculated. The enterprise will be viable if it returns all borrowed funds on time.

The auditor determines the ability of the enterprise to fulfill its obligations by analyzing the structure of finances. Long-term assets must be funded by long-term capital, not necessarily equity. It is considered rational when the fixed capital is at least 50% financed from equity and 50% from long-term loans. For banks and creditors, this distribution of capital is positive, since there is little risk of bankruptcy if the company has a large equity capital. For an enterprise, this means using its own finances, which it is advisable to invest in the expansion of its own production or invest in the purchase of securities, provide loans to other enterprises, etc. In this case, the alienation of equity capital must be replenished with borrowed funds. The definition of financial strategy is associated with the calculation of the effectiveness of the listed activities, which must be performed by auditors.

Accounts receivable and inventories are used in the calculation of solvency indicators, liquidity of working capital (funds). Depending on how quickly they turn into cash, the financial condition of the enterprise and its solvency are determined. For this purpose, the turnover of accounts receivable is determined, which is calculated as the ratio of sales proceeds to the amount of debt. The higher this indicator, the faster the receivables turn into cash.

The auditor should especially carefully examine the organization of settlements with buyers, since the volume of sales of products, the state of receivables, and cash depend on this.

Replenishment of cash at the enterprise depends on the turnover of inventories, which is calculated as the ratio of the cost of goods sold to the average annual stocks. The higher the turnover rate, the faster inventory turns into cash. The auditor should make such calculation in dynamics for several reporting periods.

For the purpose of the normal implementation of production and marketing of products, stocks must be optimal. The presence of smaller, but more mobile inventory means that a smaller amount of the enterprise's cash is in inventory. The presence of large stocks indicates a decrease in the activity of the enterprise regarding the production and sale of products.

Thus, the auditor, when checking the financial condition of the enterprise, examines not only the actual stability, solvency and liquidity of the enterprise, but also the prospect of increasing business activity and economic efficiency.

This article reveals the relationship between audit and analysis of financial statements. The author in the article specifically dwelled on the issues and problems of the analysis program, methods and techniques for conducting the analysis. Specific recommendations are given on the use of performance evaluation indicators in the analysis of the organization's financial statements.

In the development of audit practice, the separation of interests of various partner groups of the organization is of great importance: the interests of the administration and the interests of owners, shareholders, investors. The significance of the audit from the point of view of the owner (investor) is not only in obtaining information about the reliability of the financial results of the enterprise and the compliance of the accounting policy with the current legislation, but also in mastering the following analytical information for the validity of the investment management decision:

• enterprise dynamics;
• growth, stability, decline;
• the capital structure of the enterprise: whether this structure implies a risk for the invested capital;
• place of the enterprise among other enterprises of the given branch of business.

As a result of the audit, it is important for the executive administration to determine the reserves for growth in the efficiency of commercial activity, factors for profit growth, and loss reduction. An analysis of the financial position as an integral part of the audit provides answers to these and other questions. We can safely say that the quality of the decisions made depends entirely on the quality of the analytical justification.

Reporting analysis is considered in international standards as an accompanying work during the audit. Thus, the strengthening of the analytical focus of the audit is manifested not only in an increase in the number of financial analysis services provided to clients, but also in the growing role of analytical procedures in the provision of other audit services, primarily in the audit of completed financial statements. Financial analysis in the audit, depending on the task, is a tool for obtaining audit evidence and a type of service accompanying the audit.

Analytical procedures are used to a greater or lesser extent by every auditor. Evidence is collected through analytical procedures. To the extent of his qualifications, the auditor uses analytical techniques to decide on the reliability of the value of the indicator reflected in the financial statements, through observation, comparison, confirmation, questioning, control and other procedures necessary in each specific case. As a result of the analysis, an assessment of the reliability of the audited accounting object is formed. This assessment is indirect evidence, on the basis of which the auditor decides on the need to apply other audit procedures, more focused on obtaining direct evidence, if this need is due to a preliminary analysis of the accounting object.

Abroad, the mandatory nature of analytical procedures is provided for by audit standards. The rules (standards) of audit activity in Russia, as sources of audit evidence, provide for the results of an analysis of the financial and economic activities of an economic entity. The credibility of analytical conclusions depends on the quality of the analysis performed and, if necessary, is confirmed by other audit procedures - recalculation, confirmation, documentation, etc.

Analysis is of particular importance early stages audit, including at the planning stage of the audit. At these stages, analytical procedures make it possible to determine the specifics of the client's activities, outline an audit strategy, assess the degree of audit risk, and identify problems in the formation of financial information. At this stage, the time frame, the depth of verification of the factual material, the procedures that it is advisable to apply for effective solution audit tasks.

Acquaintance with the balance sheet of the client enterprise is an almost mandatory stage of the auditor's work, both at the stage of concluding an agreement and during the audit itself. Financial estimates of accounting reports in a compressed and concentrated form are needed by the auditor as a guide, a hint for choosing the right decision in the audit process. Analytical procedures of the auditor in the course of preliminary acquaintance with the client's business are reduced to the following typical actions:

• comparison of current data with data from previous periods;
• comparison of current data with plan and forecast data;
• comparison of current data with normative (or optimal) values;
• comparison of the current data of the enterprise with the average industry values;
• comparison of financial ratios with non-financial indicators.

The purpose of applying analytical procedures is to identify non-typical situations in the activities of the enterprise and its reporting. The preliminary review procedures can be successfully applied to the subsequent stages of the review. In the course of the audit procedures themselves, the auditor, through analysis, evaluates the need to reduce or, conversely, increase the number of detailed audit procedures. If the analysis does not reveal unusual deviations, then the probability of a significant error is minimal.

Significant unexpected differences between the client's preliminary reporting for the current period and other information from previous years used in comparison are referred to as extraordinary fluctuations. One of possible causes these extraordinary fluctuations are intentional and unintentional errors in accounting and reporting. If the sum of extraordinary fluctuations is large, then the auditor should determine their causes and determine whether this is the result of normal economic events or an error.

The information base of the analysis is based on the use of various sources, including non-financial data (information from the media, explanatory notes, regulations on accounting policies, data on production capacities, number of employees, etc.). The ability to compare financial and non-financial indicators characterizes the qualification level of the auditor. At the final stage of the audit, financial analysis is necessary to evaluate the results and develop an audit opinion.

Accounting in Russia is developing in accordance with the most common international standards. In international practice, the definition of accounting includes accounting, production accounting, financial accounting, internal audit, tax accounting. Therefore, to audit activities, along with audits include the work accompanying the audit - certification services, tax services, consulting services for the administration, financial analysis (analysis of financial statements).

The proportion of audit-related services in the practice of leading audit firms in Western countries is up to 50% of all services provided. The standards for the provision of related services as part of the International Auditing Standards of the International Committee on Auditing Practice determine the content and objectives of the work. The financial statement analysis standard is separated into a separate section, which discusses the mandatory audit procedures for this analysis. This standard applies to the analysis of financial statements, but may be applied to the analysis of other financial information.

Before starting the analysis of the financial position, the client and the auditor agree on:

• the purpose of the service to be performed;
• scale of analysis;
• sample report to be submitted;
• a provision on under what circumstances an auditor's report cannot be formulated.

The auditor should perform the desk review procedures:

• obtain information about the nature of the company (enterprise);
• conduct a survey to collect information on the classification and reflection of the findings of the financial statements, compare the findings and results of the statements with the expected results;
• compare financial statements with those of previous periods;
• study the ratio of various elements of financial statements and the impact of these elements on the final result.

In fulfilling the obligation, the auditor can and should use specific analytical procedures. The totality of such specific procedures, combined in a certain logical sequence, is called the methodology for analyzing the financial position. In addition, the auditor should be aware of events that have occurred after the date of the financial statements that have caused a material change in the results reported in the financial statements.

The conclusions of the analysis carried out should be documented, and reference should be made to the methods used, with the help of which the estimated results were obtained. If the results of the financial analysis conducted by the auditor cause him doubts about the completeness and accuracy of the financial statements, then he argues the need to change the information base of the analysis, and if such a change is impossible, he does not guarantee the reliability of the analytical conclusions.

The audit report prepared by the auditor is prepared in accordance with the requirements of International Standards. The introduction of a new chart of accounts, bringing the forms of accounting and financial statements in line with the requirements of International Standards make it necessary to use a new method of financial analysis that meets the conditions of a market economy. Such a technique is needed for a reasonable choice of a business partner, determining the degree of financial stability of an enterprise, assessing business activity and the effectiveness of entrepreneurial activity. The main (and in some cases the only) source of information about the financial activities of a business partner is the financial statements, which have become public. The reporting of an enterprise in a market economy is based on a generalization of financial accounting data and is an information link connecting the enterprise with society and business partners - users of information about the activities of the enterprise.

Each subject of analysis studies information based on their interests in managing finances and other types of assets. The analysis of financial statements is carried out in order to obtain a basis for making an optimal management decision, therefore an in-depth analysis is intended for an internal user - the administration and the owner, who manage the capital of the enterprise. External users - suppliers, buyers, shareholders without the right to participate in management and other categories - use the results of financial analysis with the consent of internal users and in the form established by them.

Analysis as a category that characterizes the method of studying a phenomenon is widely used both in science and in practice. Financial analysis is a method of understanding the financial mechanism of an enterprise, the processes of formation and use of financial resources for its operational and investment activities.

The main purpose of the analysis of the financial condition of the enterprise is to identify significant relationships and characteristics of the financial condition of the enterprise in order to develop an optimal management decision. This goal is achieved by obtaining a small number of key (most informative) parameters that give an objective and accurate picture of the financial condition of the enterprise, its profits and losses, changes in the composition of assets and liabilities, settlements with debtors and creditors. At the same time, the analyst and the manager (manager) may be interested in both the current financial condition of the enterprise and its projection for the near future or a more distant period.

The purpose of the analysis takes the form of a specific management task assigned to the auditor. The analytical task specifies the purpose of the analysis, taking into account the organizational, informational, technical and methodological possibilities of its implementation. An example of analytical tasks can be:

• balance sheet liquidity analysis;
• analysis of the financial condition and solvency;
• analysis of the dynamics and structure of balance sheet items;
• factor analysis of profit;
• analysis of optimization of profit volume, production volume and costs;
• a comprehensive analysis of the financial and economic activities of the enterprise, etc.

When conducting financial analysis, knowledge of such related economic disciplines like accounting, finance and credit, economic theory, economic law. An auditor conducting a financial analysis, on the basis of this knowledge, reconstructs the activity of the object of analysis according to the source information, i.e. repeats the work of an accountant, but in reverse order - from summarizing and classifying the source data in the form of financial statements to understanding the essence of a particular business transaction. An analytical reading of the source data is necessary based on the goals of management and the task of analysis,

The main principle of analytical reading of financial statements is the deductive method, i.e. the transition from the general to the particular, which must be applied repeatedly in the course of the analysis. In the course of such an analysis, as it were, the historical and logical sequence of economic facts and events is reproduced, the direction and strength of their influence on the results of activities are determined.

Analytical information will be useless for management purposes (managers) if other necessary principles of analysis are not observed: relevance, reliability, comparability, materiality.

Relevance and credibility are the two main qualities that determine the usefulness of analytical information for decision making. Information is relevant if it is able to confirm or refute the proposed management decision. The value of the analysis lies in timeliness, which is an important aspect of relevance and validity. Information is reliable if it meets the requirements of truthfulness, completeness and neutrality.

Comparability in terms of importance occupies the same place as relevance and reliability. Comparison is one of the main techniques of financial analysis, used to increase the usefulness of analytical conclusions in making managerial decisions. The alternative choice depends on the results of comparing data with previous periods, data from other enterprises, forecast data or a plan.

Materiality characterizes the level of value of analytical calculations for solving an analytical problem. Materiality depends on a combination of many factors, including the degree of the auditor's knowledge of the analysis technology. An experienced analyst widely uses additional analytical techniques - external information, indirect evidence (for example, the relationship between the enterprise and partners), information about the technical preparation of production, expert information, etc. However, the main materiality factor is the ability to analyze in detail the financial statements of the enterprise as the main information base for analysis . Such information can be obtained as a result of a systematic study of financial statements using a scientifically based methodology.

Before the actual analysis, the auditor first of all determines its purpose and objectives. He then develops an analysis program that defines:

• methods and techniques of analysis that are optimal for achieving the goals and objectives;
• information base of analysis;
• criterion when making a decision in case of detection of extraordinary fluctuations.

When conducting financial analysis, the following main methods of researching financial statements are used:

• horizontal (temporal) analysis - comparison of each reporting position with the previous period;
• vertical (structural) analysis - identifying the impact of each reporting position on the result as a whole, i.e. determination of the structure of final financial indicators;
• comparative (spatial) analysis - comparison of the summary indicators of the enterprise's reporting with similar indicators of competitors, inter-economic analysis of enterprises in the industry, intra-economic analysis of the structural divisions of the enterprise;
• trend analysis - determining the trend, i.e. the main trend in the dynamics of the indicator, free from random influences and individual features individual periods by comparing each reporting position with a number of previous periods. With the help of the trend, the possible values ​​of the indicator in the future period are predicted, and therefore, a prospective analysis is carried out;
• factor analysis - analysis of the influence of individual factors (reasons) on the performance indicator using deterministic or stochastic research methods. Factor analysis can be direct (analysis itself), in which the effective indicator is decomposed into its constituent elements, and reverse (synthesis), in which the effective indicator is formed for individual elements;
• analysis of relative indicators (ratios) - an analysis method based on the calculation of the relationship between individual positions of financial statements in order to determine the relationship of indicators.

In addition to the listed basic analytical methods for studying financial statements, scientifically based methods of financial analysis are used:

• traditional - comparison, comparison, grouping;
• economic and mathematical - graphical, matrix methods, linear programming method, correlation and regression analysis method, set theory method, etc.;
• heuristic - methods based on expert assessments of specialists, their intuition, past experience.

The auditor selects a specific method of analysis based on the objectives of the analysis, his experience and professional qualifications, the volume and composition of the information base of financial analysis. In the theory and practice of analyzing financial statements in order to assess the effectiveness of an enterprise, heterogeneous indicators of profitability are used, which differ both in the purposes of application and in the methodology for their calculation and interpretation. This creates the problem of their mutual linking and, most importantly, the substantiation of the indicator that can be used as a generalizing criterion of performance. The presence of such (such) criteria for assessing the effectiveness of activities allows you to create a complete picture of the financial condition of the organization and characterize its prospects.

At the same time, the change in all other indicators of a particular nature is considered from the standpoint of their influence on the general indicator. This ensures the mutual linking of indicators that characterize the effectiveness of the organization's activities from different angles. From the point of view of shareholders, the best assessment of the results of economic activity is the presence of a return on invested capital. The indicator of profit on the capital invested by shareholders (owners), called the return on equity, is determined by the formula:

Return on Equity = Net Income / Equity

Being a general indicator that comprehensively characterizes the efficiency of an enterprise, the return on equity is a function of three main indicators that characterize the profitability of the operating, investment and financial activities of an enterprise. Among the indicators of profitability, the key characteristic in assessing the return on equity is the profitability of operating activities, which, in turn, can be characterized by two groups of indicators. The indicators of the first group represent the ratio of profit and invested capital and characterize the profitability of investing capital in the organization's assets. The second group is the ratio of profit and sales volume, which characterize the effectiveness of sales. The indicators of the second group can also include an indicator representing the ratio of profit to expenses incurred.

As a generalizing quantitative characteristic of the profitability of operating activities, a financial ratio, called the return on assets, can be used. The economic meaning of the indicator is that it characterizes the return on each ruble invested in the assets of the enterprise.

Return on Assets = Profit / Average Assets

According to the ratio of profit and sales volume, the value of the indicator, called the profitability of sales, is determined. To calculate it, the formula is used:

Return on sales = Profit / revenue from the sale of products

On the basis of the formula, a group of indicators of return on sales can be calculated, the differences in the calculations of which will be associated with the choice of the numerator. The latter can be gross profit, profit from sales, profit before tax, profit from ordinary operations or net profit. In the practice of analysis, the indicators under consideration are called intermediate levels of profitability. The considered profitability indicators characterize one approach to assessing the effectiveness of an enterprise: they indicate the profitability of capital investments in a particular enterprise. But another approach is also possible, involving an assessment of the effectiveness of the costs incurred. Within the framework of this approach, indicators are calculated that represent the ratio of sales revenue to expenses or profit (before tax) to expenses. The above profitability indicators reflect the objective financial position of the organization.

References

1. Accounting financial statements. Ed. prof. V.D. Novodvorsky. M. Infra-M. 2003.

2. Marenkov N.L., Veselova T.N. International accounting, financial reporting and auditing standards in Russian companies. M.. URSS, 2004.

3. H. Van Grüning, M. Cohen. International Financial Reporting Standards M. The whole world. 2003.

4. Analysis of financial statements. Ed. O.V. Efimova. M.V.Melnik M.Omega-L. 2004.

5. Introduction to international standards fin. Reporting. Under the editorship of prof. L.Z Shneidman. M. Price Waterhaus Coopors. 1999

6. Federal Law "On Accounting" No. 129-FZ, dated November 21, 1996, with subsequent amendments and additions.

7. Federal Standards audit activities, approved by Decree of the Government of the Russian Federation of September 23, 2002, No. 696, with subsequent changes and additions.

8. Suvorov A.V. IFRS and Russian RAS: similarities and differences. Audit and taxation, 2005. No. 4.

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