Despite the fact that the audit is classified as a method of financial control, its only definition can not be found. As for the scientific provisions, some scholars believe that the audit is a comprehensive examination of all financial and economic activities of the legal entity for the reporting period. Others – audit is an important method of controlling the expenditure of funds, their safety, the state of accounting and reporting in government agencies.
When searching for a legal definition, a direct definition cannot be found, but you can specify Article 4 of Law № 2939-XII, which provides that the inspection is carried out by the state financial control in the form of audit, which consists of documentary and factual issues of financial and economic activities institution, which must ensure the detection of existing facts of violation of the law, the establishment of those responsible for their admission.
Regarding the audit, we have a legal definition in paragraph 1 of Article 1 of Law № 2258-VIII, which states that the audit is a service to verify accounting data and financial statements in order to express an independent opinion of the auditor on its compliance in all material respects. accounting standards.
Therefore, in both cases, we have an audit of the financial performance of certain entities, using similar methods of control, as well as the same sources – legislation and primary accounting documentation.
The doctrine suggests that an audit involves a retrospective form of control, while an audit is forward-looking. This idea can be explained as follows:
“ The audit examines past financial transactions based on the documentation provided. The main purpose of the audit is to identify financial violations, abuses, and to bring to justice those who committed these offenses. That is, the audit is carried out only from the standpoint of legality of the past. As for the purpose of the audit, it depends on whether the audit is mandatory or proactive.The purpose of the mandatory audit is to confirm the reliability of financial statements, as companies are required to publish financial statements. reporting together with the auditor’s report on its website. “
If the audit is proactive, the customer of the audit carries it out when he feels the need to verify the correctness of the accounting system and the compliance of actual activities with accounting, etc. In addition, the auditor may provide advice on how to perform and correct deficiencies. The purpose of the initiative audit is to identify and eliminate violations in a timely manner, so as not to be prosecuted and to improve the development of the legal entity, ie action for the future.
The audit is carried out by the State Audit Office and interregional bodies of the State Audit Office – which is endowed with state powers.
The audit is performed by an auditor – a natural person who has confirmed the qualification for conducting auditing activities, has relevant practical experience and is included in or auditing firm. That is, an audit can be initiated at any time, regardless of when the previous audit was conducted and whether or not an audit is required. If the customer is interested in conducting the audit, the audit is appointed by the decision of the head of the relevant body of state financial control without approval. Therefore, the audit is perceived mostly negatively.
Thus, an audit differs from an audit in its purpose, subject matter, basis of implementation, and planning.