Auditing & Assurance

With businesses seeking to achieve success on a global scale, it is becoming more and more imperative to set the right regulatory practices in auditing and assurance. We assist you in meeting these demands by conducting thorough audits and providing seamless assurance as part of our services. We not only provide high-quality services for you and your organization, but also present clear and transparent information, which is beneficial for your stakeholders and investors.

Our Audit and Assurance Solutions help clients not only achieve their regulatory objective as an Attest Function, but also achieve control over the business objective from an accounting and financial perspective.

Statutory Audit

We undertake the statutory audit of many commercial businesses that require an audit for a variety of reasons including:

They are a public company

They are a small foreign-controlled company

It is a requirement under their financing facilities

It is a requirement under their shareholder agreement or constitution.

Whilst our audits are undertaken in accordance with the Auditing Standards, they also focus on providing insight into internal control systems, quality and completeness of accounting records, adequacy of accounting policies, compliance with applicable legislation and risks faced by the business.

Internal Audit

Unlike external audit which focuses primarily on financial accounting and statutory reporting compliance, internal audit is a broad-based assurance function to strengthen organizational operations and governance. Effective corporate governance is about more than policies and procedures. Your directors and board must be actively involved in decision making across your organization, and for this they need reliable and timely information and advice.

Our internal audit process is designed and executed in accordance with the Standard on Internal Audit issued by the Institute of Chartered Accountants of India. It is an independent, objective assurance activity designed to add value to business operations and assist an organization to accomplish its objectives by:

Bringing a systematic and disciplined approach to business risk evaluation

Improving the effectiveness of risk management processes

Improve the effectiveness of internal control processes

We offer a flexible engagement model that enables customizing engagements based on your organizational needs. We can help your board and management demonstrate effective corporate governance by:

Measuring and improving business performance

Identifying business deficiencies

Reviewing strategic and corporate planning processes

Assessing board and sub-committee performance, including individual director assessments

Assessing board control including delegations and policy setting

Preparing independent performance audits and valuations of specific activities

Investigating allegations and complaints

Creating a fraud-resistant structure

Tax Audit

Under direct taxes, the CBDT has posed onerous responsibility on the auditor via the Income Tax Act 1961 which has various provisions requiring a compulsory tax audit. For tax purposes, the Income Tax Act 1961 specifies several provisions that allow public charitable trusts, corporate and non-corporate assesses, and others to conduct a tax audit.

Arpitha & Associates is known for delivering quality services to its clients. The professional team helps in developing strategies and an effective management system that enhances operations and provides significant value to the business. We at Arpitha & Associates firmly believe in Tax Audits being a value addition exercise rather than a mere compliance exercise.

Management Audit

Rapid change in the business environment is fueled by political, economic, social, cultural and technological changes. Management in start-ups and mature organizations must recognize, adapt, and change.

Management audits play a crucial role in helping a leadership team to improve their operational processes. Our evolved methodologies not only provide qualitative assessments of risk that highlight the fundamental causes of performance gaps, they also deliver authentic and relevant solutions to prevent repeats. Early warning reporting identifies potential fraud and accounting irregularities. All this helps to improve the earnings potential of our clients.

Offerings:

Internal audit

Internal financial control

Process review

Standard operating procedures

Risk assessment

Due diligence audit 

Organizations in both the commercial and not-for-profit sectors often have business or acquisition opportunities. Management or the governance body will often request an independent opinion on certain aspects of financial risks.

An emphasis on purpose

We design our due diligence procedures with an emphasis on the purpose and objectives of the due diligence activity. This involves working closely with management or a project team to determine what key risks might exist. This involves determining which of the key risks could have material financial consequences and the nature of evidence that would provide greater insight into the potential risk consequences.

We assist organizations in the design and execution of due diligence processes as part of business restructurings, mergers and acquisitions.

Fixed Asset Audit

Accurate Financial Asset Register provides True representation of Fixed Assets in Balance Sheet

Enterprise Asset Management

We provide baseline asset inventory & tagging services to organizations across all industries as the first step to implementing Enterprise Asset Management. The asset inventory data becomes the foundation for efforts to limit capital spending, optimally utilize capital assets, mitigate maintenance & repair expense, and control a variety of other operational aspects of physical assets.

Inventory & Reconciliation

Our flagship service is a comprehensive approach that cleanses and fortifies your fixed asset register to establish a stronger foundation for effective long-term asset management. In addition, fixed asset inventory and reconciliation services provide the necessary data visibility to avoid the risk of non-compliance with financial, tax and regulatory issues. Reconciliation of inventoried assets to a fixed asset ledger and other corporate asset management databases (e.g. IT, Facilities, Maintenance, etc.). Detailed review and reconciliation of remaining capital assets not able to be inventoried, including real property, bulk assets, ghost assets, intangibles, etc.

Asset Verification & Tagging

There is no room for error when you need a precise picture of your company’s physical assets. Knowing exactly what assets you currently have, where these assets are located and how these assets are changing over time, allows a company to keep track of details of each fixed asset, ensuring control and preventing misappropriation of assets.

Asset verification and tagging leads to identification of assets put to actual use. The rest of the assets can be reconciled and cleaned out of the books of accounts. This exercise helps to keep track of the correct value of assets. This allows for computation of depreciation and taxes for insurance purposes while ensuring compliance with corporate and government policies. The use of bar-coding technology makes asset verification simple and efficient. Additionally, this exercise helps to clean up the asset register by identifying any disposals or movements that may not have been recorded in the books as well as providing up-to-date information about each asset.

Business Process Audit 

A business process audit is a formal and technical way to derive and assess whether the company is managing its business processes, taking into account:

The strategic objectives of the organization

The specific goals

Suitable procedures

Also, one must make sure that:

The performance of processes is within the desired standards

Controls are suitable for the correct measurement of processes

The procedures are suitable to achieve the desired levels of efficiency and effectiveness

As it turns out, a business process audit is a warning that the administration should take action if necessary. It is also a guarantee that the work is being done right, when auditors verify it.

The audit process has become a necessary element for most large companies to remain competitive with the competition, ensuring the delivery of expected value to customers and business sustainability.

Business Process Audit Benefits

Risk analysis and contingency procedures

It promotes more transparency and corporate governance

Verification of controls used and their suitability for the business

To verify how often the defined procedures and practices are adequate

Provide information for decision making on improvements and changes in processes

Inventory (Stock) Audit

Auditing inventory is the process of cross-checking financial records with physical inventory and records. It can be completed by auditors and other parties.

Auditing inventory can be as simple as conducting a physical count of stock and inventory to match the records with physical stock.

Importance of Auditing Inventory

Observation of inventory is a generally accepted auditing procedure. This is where an independent auditor issues an opinion on whether the financial records of inventory accurately represent the actual inventory being carried.

Auditing inventory is an invaluable aspect of gathering evidence, especially for manufacturing or retail-based businesses. It can represent a large balance of assets or capital.

Auditing inventory must verify not only the amount of inventory but also its quality and condition. This is to see whether the value of inventory is fairly represented in financial records and statements.

Auditing Inventory Procedures

Some common auditing inventory procedures are:

 1. ABC analysis

In an ABC analysis, different value and volume inventory items are grouped. For example, high-value inventory, mid-value, and low-value products can be grouped separately. The items can be tracked and stored in their respective value groups as well.

2. Analytical procedures

Analytical procedures include analyzing inventory based on financial metrics such as gross margins, days inventory on hand, inventory turnover ratio, and costs of inventory historically. 

3. Cut-off analysis

The cut-off analysis includes pause operations such as receiving and shipping inventory while making a physical count to avoid mistakes.

4. Finished goods cost analysis

Finished goods cost analysis applies to manufacturers and includes valuing finished inventory during an accounting period.

5. Freight cost analysis

Freight cost analysis includes determining the shipping or freight costs for transporting inventory to different locations. Generally, freight costs are included in the value of inventory, so it is critical to track freight costs as well.

6. Matching

Matching involves matching the number of items and the cost of inventory shipped with financial records. Auditors may conduct matching to verify that the right amounts were charged at the right time.

7. Overhead analysis

Overhead analysis includes analyzing the indirect costs of the business and overhead costs that may be included in the costs of inventory. Rent, utilities, and other costs can be recorded as part of inventory costs in some cases.

8. Reconciliation

Reconciliation includes solving discrepancies that are found in an audited inventory. Errors may be re-checked and reconciled in financial records.