Audits

The Accounting Act requires certain entities to have their financial statements audited by a statutory auditor. The objective of the statutory audit is to obtain an opinion from an independent person (statutory auditor) that the financial statements give a true and fair view of the company’s economic situation.

Financial statements serve as an important source of information for suppliers, customers, employees, potential investors, banks and of course for owners who need to rely on them.

Reporting packages are usually prepared by subsidiaries for their parent companies abroad. As auditors, we are able to verify that the reporting package presented complies with IFRS or US GAAP or is prepared in accordance with the Group’s accounting manual.

There are a number of subsidies, either from Czech public finances or from EU structural funds, which require verification by an independent auditor. We regularly encounter them in business entities and non-profit organizations. The main objective of a subsidy audit is to assure the contracting authority that the terms and conditions of the subsidy have been complied with.

For non-profit organisations, an audit is also the process of verifying that the financial statements give a true and fair view of the organisation’s financial position. As in other cases, we communicate the results of the audit in an audit report. Organisations can publish this information to comply with legal requirements and obligations to donors or other stakeholders.

As external auditors, we also perform reviews at the level of municipalities, cities and regions. Our aim is to verify that local authorities are managing the allocated funds in accordance with the public interest and do not exceed the legal framework. If necessary, we also monitor whether they have functional control mechanisms in place to prevent waste of public funds and possible overstepping of the law.

Thanks to the internal audit, the company’s management gets an overview of how well or badly the procedures, operations and control mechanisms are set up in their company. Internal audits are carried out by specialists who monitor compliance with set processes, assess potential risks and point out weak points.

A forensic audit is a special type of audit that is conducted to detect financial fraud or illegal activities in companies or organizations. Its aim is to detect all irregularities and illegal accounting. A forensic audit is often approached when corruption or misuse of funds is suspected.

The due diligence usually comes before the establishment of a certain business relationship. Often this is an acquisition or capital investment.

This type of audit should provide the investor with very detailed information on how the organisation it wants to buy, merge with or invest in is doing. In this context, a financial, legal, operational or personnel analysis is carried out. This allows the investor to decide whether or not to give the business the green light.