Auditing Jargons You Need To Know

Company managers hire auditors to check and spot discrepancies in different aspects of the organization. Unfortunately, these findings go unnoticed.

Company managers hire auditors to check and spot discrepancies in different aspects of the organization. Unfortunately, these findings go unnoticed because there are auditing terms and jargons that most people are not familiar with.

Do not let a good auditing report go to waste. Here are some terms that approved auditors in Dubai use for their reports:

  • Accounting data

An accounting data refers to the journals, ledgers, or any document that corroborates the financial statement presented to the auditors for check and balance. These documents are usually with the accounting and finance team of the organization. When the auditing season starts, auditors request for the original copy of these papers so they can do their auditing.

 

  • Analytical procedure

Analytical procedure is mainly a procedure that compares the financial statement to the auditing team’s expectations. Auditors usually set a benchmark on what a company should be incurring over a period of time based on different variables. During the auditing, these professionals take note whether the company was able to reach that benchmark based on the financial statement and explain it on their audit documentation.

 

  • Control environment

The term “control environment” basically something that the organization is in control with, whether it is tangible or not. For instance, it can refer to the procedures, policies and rules set by the organization along with the organizational structure, practices and decisions made the board of management.

 

  • Turnover

Turnover refers to a number of things, depending on the aspect or part of the company that is being audited. For instance, if you are doing an audit for human resources, the turnover would be related to the employee turnover rate which discuss the rate in which new employees is replacing the old ones. In terms of sales, it would mean the time of receipt of the inventory items up to the point of it is sold.

 

  • Sample size

Some auditors usually handle big companies and have to do group discussion to get data and facts. But if the company has thousands of employees, the auditor will not be able to accommodate all. To at least and extract data from a large population, the auditor select a “sample” from a population that will be used for auditing. These sample size is selected based on different variables and data needed.

 

  • Third party

In auditing and accounting, the term third party connotes any individuals or parties that is not a member of the organization but is somehow connected to it due to different reasons.

Visit website to know more about auditing jargons.

This article was written by admin