Types of Audits Offered by Professional Audit Firms

Auditing is a critical component of financial transparency, risk management, and regulatory compliance for any business. Whether you're a startup, SME, or large enterprise, understanding the types of audits offered by professional audit firms helps ensure you're selecting the right services for your needs. This article outlines the most common audit types and their significance in maintaining financial health.

1. Statutory Audit

A statutory audit is mandated by law to ensure the accuracy of a company’s financial statements. It’s primarily conducted for companies registered under the Companies Act and ensures compliance with legal standards.

Key Features:

• Mandatory for certain entities

• Increases credibility with investors and stakeholders

• Conducted annually by external auditors

 2. Internal Audit

Internal audits are independent evaluations conducted within the organization to assess internal controls, risk management, and operational efficiency.

Key Features:

• Ongoing or periodic

• Helps detect fraud and inefficiencies

• Advises on internal process improvements

3. Tax Audit

A tax audit is conducted under the Income Tax Act to verify the correctness of income and deductions declared by a taxpayer. It ensures compliance with tax regulations and is mandatory for businesses exceeding specific turnover thresholds.

Key Features:

• Mandatory under Section 44AB of the IT Act

• Helps avoid tax penalties

• Evaluates proper maintenance of books of accounts

4. Forensic Audit

Forensic audits are detailed investigations conducted when there is a suspicion of fraud, financial misreporting, or legal disputes. These audits often support litigation or regulatory scrutiny.

Key Features:

• Deep investigation of financial irregularities

• Supports legal proceedings

• Focused on detecting fraud or misconduct

5. Information Systems (IS) Audit

IS audits focus on the efficiency, integrity, and security of information systems, especially in tech-heavy organizations. It helps assess IT controls, cybersecurity protocols, and data management practices.

Key Features:

• Critical for tech-based or data-sensitive companies

• Evaluates cybersecurity risks and data integrity

• Often requested by companies undergoing digital transformation

6. Compliance Audit

Compliance audits assess whether a company is following regulatory, statutory, or internal policy requirements. These are commonly required in sectors such as finance, healthcare, and manufacturing.

Key Features:

• Industry-specific regulatory focus

• Ensures adherence to laws and internal protocols

• Reduces risk of penalties or license issues

7. Operational Audit

Operational audits analyze business processes for efficiency, effectiveness, and cost control. This type of audit goes beyond financial records and examines how resources are used within the company.

Key Features:

• Enhances performance and profitability

• Identifies process bottlenecks

• Ideal for scaling businesses

 Conclusion

From statutory and internal audits to highly specialized forensic and IS audits, professional audit firms offer a comprehensive range of services tailored to a company’s stage, size, and industry. If you're searching for trusted audit firms in Pune, Jordensky offers tech-enabled, expert-driven auditing services that ensure financial accuracy, compliance, and peace of mind. Whether you're a growing startup or an established enterprise, Jordensky brings clarity and control to your financial operations.