Audit process-FOZL - International Accounting & Advisory Firm

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Audit process

An audit is a formal examination of the financial accounts of an individual, business, or organization. Internal audits are conducted by members of the same organization or business, while external audits can be conducted by regulatory or government bodies.

Appointing Auditors

For Singapore companies that meet the audit requirements, the company directors must appoint an auditor within three months of the company's incorporation. The auditor's term runs from the date of appointment until the conclusion of the company's next annual general meeting. Therefore, when a newly incorporated Singapore company first appoints an auditor, that auditor will serve until the conclusion of the company's first annual general meeting. Then, during the first annual general meeting, the company must appoint a new accounting entity (or reappoint the same accounting entity) as the company's auditor until the conclusion of the next annual general meeting. The auditor will continue to serve until the conclusion of the company's subsequent annual general meetings. If the directors fail to appoint a company auditor, any company member may apply to ACRA for the appointment of a company auditor. The removal of a company auditor can be determined by a resolution passed at a general meeting with special notice.

To ensure a successful audit, six specific steps should be followed during the audit process:

Requesting Financial Documents

After notifying the organization that an audit is forthcoming, the auditor will typically request the documents listed on the preliminary audit checklist. These documents may include a copy of the previous audit report, original bank statements, receipts, and general ledgers. In addition, the auditor may also request an organizational chart, copies of board and committee meeting minutes, and copies of the articles of association and bylaws.

Preparing an Audit Plan

The auditor reviews the information in the documents and plans how to conduct the audit. A risk workshop may be held to identify potential issues. An audit plan is then drafted.

Scheduling an Opening Meeting

Senior management and key administrative personnel are then invited to an opening meeting where the auditor introduces the scope of the audit. The timeframe for the audit is determined, and any timing issues, such as scheduled vacations, are discussed and addressed. Department heads may be asked to notify staff of potential interviews with the auditor.

Conducting On-Site Fieldwork

The auditor uses the information gathered from the opening meeting and uses this information to finalize the audit plan. Fieldwork is then conducted by interviewing staff and reviewing procedures and processes. The auditor tests whether policies and procedures are being followed. Internal controls are assessed to ensure they are adequate. The auditor can discuss issues as they arise, giving the organization an opportunity to respond.

Drafting the Report

The auditor prepares a report detailing the audit findings. The report includes mathematical errors, posting issues, approved but unpaid payments, and other discrepancies; other audit issues are also listed. The auditor then writes a commentary explaining the audit findings and suggested solutions to any identified issues.

Scheduling a Closing Meeting

The auditor requests a response from management indicating whether they agree or disagree with the issues in the report, outlining management's action plan to address the issues, and the expected completion date. At the closing meeting, the parties involved discuss the report and management's response. Any outstanding issues are addressed at this time.

Singapore FOZL Group Co., Ltd.
Singapore FOZL Group Pte. Ltd.
Singapore Accounting and Corporate Regulatory Authority licensed corporate advisory firm
Registered Singapore Company Annual Audit Taxation
Trademark Registration Corporate Advisory Serviced Office
6 Raffles Quay, #14-02, #14-06, Singapore 048580

Audit Exemption

Audit exemption

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