Audit

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Whenever it comes to shareholder meetings, company management, external funding, taxation, or even just everyday routine, assurance on the reliability of the financial information is of crucial importance.

Our high-quality audit work maintains confidence towards owners, directors, employees, and external parties such as banks, customers, vendors, and tax authorities

Our approach focuses on understanding your business and procedures. It combines a rigorous risk assessment, diagnostic processes, audit testing procedures as well as a continuous assessment of our clients’ service performance.

Our auditor has more than 10 years experience gained at international audit companies in Hungary and abroad.

 

Our audit services are:

  • auditing financial statements based on Hungarian accounting standards
  • auditing financial statments prepared on the basis of IFRS
  • auditing financial statements based on other standards
  • auditing mergers, demergers and other transformations
  • auditing consolidated financial statements
  • auditing in-kind contribution valuations

Our method

The method we appy fully conforms both the Hungarian and the international standards on auditing. We carry out our audit engagements on risk-based approach, which is effective, cost and time saving method.

1. First steps

After the initial approach we make a visit at our prospective client. In this meeting we discuss the requirements of our partner and the details of the audit. Getting to an agreement the supreme body (general meeting, general assembly) will appoint the auditor in its decree, and the engagement letter will be issued. Within 90 days after our appointment we conclude the audit contract. You may find the sample of our audit contract here.

Together with the contract we carry out the client screening which is obligatiory based on the Act 136 of 2007 on Prevention of Money Laundering and the Financing of Terrorism.

In general the audit is carried out by two on-site visits.

2. Interim audit

The main purpose of the interim audit is to prepare the risk based year-end audit. Within this we understand our client, internal and external economic environment, operation, structure, business activity, accounting systems and procedures. When we understand our client we also assess those risks that may have impact on the preparation of the financial statements. We assess the sales and purchase procedures, human resource procedures, information systems. If the systems of the client incorporate proper controll points, then we test the effectiveness of those. In case of operating and effective controls this may dramatically reduce the work of the year-end audit.

During the interim visit we will test the most important, significant transactions, and we will review the memorandums of the board of directors and the general meetings, and also the changes in the company’s legal status.

Based on our tests and risk assessments we prepare the audit programme of the year-end audit.

After the interim visit we assemble and issue management letter to our clients which together with our recommendations will give information on the defects, errors, or areas for development.

3. Year-end audit

The year-end audit mean significant work, concentrating on the year-end balances, closing procedures and financial statements preparation. On the basis of our audit programme and materiality calculations we carry out analytical tests or substantive tests to obtain assurance about the existance, completeness and accuracy of the balances in the balance sheet and profit and loss account.

We start our year-end audit when the closing has already been done – with the exception of some minor postings. After receiving the trial balance we select the balances and items for testing, and the auditor will hand over the list of required documents and vouchers.

The vouchers will be tested, and the questions arising will be discussed abd cleared off at the proper level.

After executing the tests we prepare the summary of differences, and had it over to our client together with our recommendations. We discuss and negotiate the corrections, and upon posting we test the adjustments.

Having the trial balance and postings finalized we review the year end tax calculations, such as corporation tax and local business tax.

We chekc the notes to the financial statemens, and if needed then we make our recommendations to correct missing or faulty information and data. We also review the business report.

4. Closing the audit

In this phase we review the events that took place after the balance sheet date, if there were any changes that had significant impact on the company.

We review the legal representation letter obtained from our client’s attorney on the legal proceedings and court cases.

We require management representation in writings in which the management declares that all documentation and information were handed over to the auditor, and those are reliable and complete.

Upon completion the financial statements will be signed by the client, and we release the audit report.

After closing the audit we will assemble the year-end management letter including our findings on smaller discrepancies, defects, and areas for development.

To further improve our customers’ satisfaction and as well our services we send out a questionnaire to you, and will ask you to evaluate the audit service you received.

 

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