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What are Audit Services?
Audit services are an essential part of any organization’s financial management and risk management strategy. These services provide an independent assessment of an organization’s financial statements, operations, and internal controls. An audit is performed to ensure that the company is following accepted financial reporting standards and laws and that the financial statements are dependable and accurate.
There are several types of audit services that organizations can utilize, including financial statement audits, operational audits, and compliance audits. The most frequent sort of audit is a financial statement audit, including checking the accuracy and compliance with generally accepted accounting principles of an organization’s financial statements (GAAP). Operational audits, on the other hand, focus on evaluating the efficiency and effectiveness of an organization’s operations.
Audit services are performed by certified public accountants (CPAs) or other qualified professionals. These professionals have the necessary knowledge and expertise to conduct an accurate and thorough examination of an organization’s financial records. They also provide valuable recommendations for improving financial management and risk management processes.
What are Non-Audit Services?
Non-audit services refer to any service provided by an audit firm that is not directly related to the financial audit of a company. These services can include tax planning and preparation, consulting on financial systems and processes, and providing advice on mergers and acquisitions. Non-audit services can be a valuable resource for companies looking to improve their financial operations and increase their bottom line.
One of audit firms’ most common non-audit services is tax planning and preparation. Companies rely on their audit firms to provide expert guidance on tax laws and regulations and to help them identify any potential tax savings opportunities. This can include everything from reviewing tax returns and identifying deductions to providing advice on tax strategies to minimize liability.
Another important non-audit service provided by audit firms is consulting on financial systems and processes. This can include helping companies improve their accounting systems, implement new financial software, or even redesign their financial operations. By providing expert guidance and support, audit firms can help companies streamline their financial operations and improve their overall performance. This can increase financial reporting and improve decision-making capabilities.
Difference Between Audit Services and Non-Audit Services
- Audit services focus on a company’s financial statements and records, whereas non-audit services are broader and can include various financial and business-related services.
- Audit services are mandatory and required by law, whereas non-audit services are optional and chosen by the company.
- Audit services are performed annually, whereas non-audit services can be performed as needed or on a regular basis.
- Audit services are focused on ensuring compliance with financial regulations and detecting potential fraud or errors, whereas non-audit services focus on improving financial operations and increasing profitability.
- Audit services are performed by auditors who are trained and licensed professionals, whereas non-audit services can be performed by a variety of experts such as accountants, consultants, and financial analysts.
Comparison Between Audit Services and Non-Audit Services
|Parameters of Comparison||Audit Services||Non-Audit Services|
|Focus||Financial Statements & Records||Financial and Business-related Services|
|Performed By||Auditors||Accountants & Analysts|