Our Audit Approach
Delivering assurance excellence in a changing economy
Understanding your business environment
Following the recent corporate governance scandals that have shaken investor confidence, companies across North America have reached a critical point. Heightened regulatory scrutiny is placing greater pressure on all levels of corporate management, while boards of directors and audit committees grapple with the expectation that they should assume more responsibility for overseeing the financial reporting process. Geographically dispersed organizations face unique issues as well, as they strive to ensure quality and completeness in their financial reporting processes on a worldwide basis.
The audit process
Helping you meet today’s challenges
Given these challenges, it’s more important than ever for businesses to work with trusted advisors. The Advisory and Assurance Services professionals at Deloitte & Touche can help. Our team approaches your audit with a solid knowledge of your company’s business practices, operations, and industrial sector. We also bring you an in-depth understanding of evolving accounting practices and changes in the regulatory environment. As a result, we can provide you with a fully integrated audit plan that’s driven by a fine-tuned methodology, one which allows you to identify new and emerging risks, and assess the effectiveness of your internal controls.
First-class audit processes
Your business is unique. Your audit should be too. That’s why our experts work with you to develop an audit approach tailored to your organization. After achieving an understanding of your business, we pinpoint areas of potential risk, ensure the necessary internal controls are in place, and—when we detect weaknesses—recommend effective, practical solutions. We also help you go beyond mandatory regulatory requirements to respond dynamically to the diverse needs of your crucial stakeholders, including management, the board of directors, creditors, and shareholders. The outcome is enhanced credibility for your company in today’s demanding new marketplace.
A proven approach
To help you meet the highest standards of financial reporting, Deloitte & Touche’s Assurance and Advisory professionals adopt a three-phased audit approach:
- Your audit plan. During this phase, our experts develop an understanding of your business operations so we can address any financial reporting risks. Once we comprehend those factors that are unique to your business, we review your company’s internal controls. Then we design detailed procedures to ensure your financial information fairly presents the results of your company’s operations, cash flows, and financial position.
- Rigorous testing. After developing our tailored audit procedures, we subject your financial data to a series of stringent tests. When using a control reliance strategy, we first design and perform tests to make certain that each control activity identified provides a reasonable assurance of achieving its objective. This allows us to ensure that your financial reporting systems generate reliable data, reducing the amount of necessary detailed transaction testing. We review your accounting policies to ensure that they are in compliance with generally accepted accounting principles (GAAP). Then we conduct substantive tests to confirm that your transactions are accounted for in accordance with your accounting policies, that all material assumptions used to determine your significant estimates are both data-supported and reasonable, and that your account balances and other financial measures are fairly presented in accordance with GAAP. In this way, we help you produce financial reports that are clear, readable, and transparent. That’s the Deloitte & Touche commitment—to meet your necessary auditing requirements and exceed your expectations through our added-value services.
- Business-focused recommendations. As a final step in our auditing process, we assess the accounting principles and estimates used to prepare your financial statements. Based on this thorough analysis, Deloitte & Touche is ideally positioned to offer you useful business advice and help you benchmark your practices and results with those of your competitors. We also provide you with insights and solutions concerning potential internal control deficiencies. The result? Your company’s management, board of directors, and audit committee are better able to execute their oversight duties.
Providing the necessary expertise
Ultimately, we are about people and knowledge—and about how the two interact to deliver business ideas, advice, and solutions. We bring in the industry experts required to properly comprehend the specifics of your business—including marketing, production, finance, operations, tax, and IT—so we can tailor our audit approach accordingly. This understanding enables us to provide you with actionable recommendations to manage and mitigate risk, and ultimately issue an assurance opinion that addresses those issues specific to your company’s financial reporting.
In addition to our team of assurance experts, we rely on advanced proprietary technology called AuditSystem/2 to manage multi-site audits and develop common documentation that promotes the effectiveness of our audit approach and procedures. It lets our audit team particularize the audit approach to the unique characteristics of your company’s operations, controls and risks. AuditSystem/2’s embedded control databases assist our team in understanding and evaluating your company’s business cycles, enabling us to rapidly identify potential issues and accurately benchmark your company against your competitors.