Audit Cycle in Accounting

It is a process in accounting that is employed by auditors in order to analyze the financial performance and review the financial information of the company. The audit cycle is conducted in every financial period or a given financial year before releasing the financial statements containing information of the company in public. This cycle checks the validity and the transparency of the information before making it public. There is no pet schedule or time to run an audit cycle as it can be run at any time in the financial period. Sometimes a firm runs audit cycle runs in various steps for example in first step inventory is counted in one month say in March and in next step account receivable can be analyzed in June and so on. Steps in Audit Cycle Identification Stage In this stage auditor meets the company representatives to find out the areas of accounting that are going to be reviewed and analyzed Methodology Stage In this stage the methodology of the audit is determined. Auditors which method will be used to collect and analyze information of the company Field Work Stage In this stage auditors compare different accounting samples and ultimately test these samples Management Review Stage In this stage the findings of the auditors regarding financial information and state of the company are presented before management for review purpose. Management will analyze the information and gives it consent whether this information is accurate and transparent to make it public in the form of financial reports and statements.

Other Related Accounting Articles:

• Unqualified Audit
• Inventory Audit Method
• Information Analysis
• Short Form Report
• The Concept of Accountability in Accounting
• Going Concern Concept
• Accounting Period
• API Accountants for Public Interest
• Manufacturing Cycle Efficiency (MCE) Definition
• Financial Analysis