Essential facts about Essential Commercial Audit Services

Posted by Troy Banks on March 19th, 2020

What is Commercial Auditing?

It is the examination of all the commercial activities of a business. These auditing services include market research and consumer research. It also looks into the commercial offers which are available in a market and possible risks.

For whom is Commercial Auditing done?

• Public company
• Large company
• Small foreign-controlled company
• A requirement under their financing facilities.

Somethings you should know about the same.

• It is performed by an external auditor who is appointed.
• The books of accounts are audited periodically.
• These auditors do not work for employees but for organizations.
• A cashier is not involved.
• Auditing is done under accounting principles.
• Advanced technology is used.
• A review of the financial statement is done.
• Auditors also do management consulting assignments.

Types of Audits:

1. Wireless communication audit services and Telecommunication

It is an auditing process where the environment and the protocols, according to SCI rules, are taken into consideration. The security of wireless communication is mainly looked after. To check the security, many tests are taken, and analysis is done. The faults are then found out. Other things which are done:

• Problems in network access control are found.
• Errors in the implementation of the networks are found
• Be safe security-wise, and reduction of attacks is made
• Implementation of corrective actions.
• Version is checked, and faults are corrected.
• Bills are reviewed.
• Verification of the phone contracts to know if the bills provided to you are correct.
• Evaluation and cost comparison of communication providers.

Tests performed are:

• Password check
• Encryption
• Denial of Service attacks test

1. Utility Audit

The auditing done for in-house bills is utility auditing.  Electric, gas, fuel, water, sewer, and steam bills are taken into consideration. Things looked into it are:

1. Errors with meter-read
2. Rates mismatch
3. Meter malfunctions
4. Installation of Wrong meter types
5. Errors in bill

3. LED street light conversion auditing service

The errors of over-billing from the people or other errors are checked by a forensic audit. Geographical audits are done which gives a cost statement regarding the ownership of streetlights. Things looked into are:

• Do thorough research on quantity, wattage, condition, and location
• The geographical audit is done, so the municipality has the entire system diagnosed
• Determine who owns the utility or municipality.
• Lighting level standards are compared
• Municipality needs are taken into account
• Checking is done for the areas which are over or under lit.
• A lighting plan is made
• Lighting objectives are pulled into action
• Efforts for saving light and energy is made

 4. Solid Waste, Garbage and Recycling Audits

Solid waste, garbage, and recycling bills and services are audited, and the auditors are able to tell you if you are paying the lowest prices for proper service. Errors seen are:

• Problems with billing charges
• The excessive annual rate increase
• Breaches in the service agreement.

Things looked into are:

• Billing errors
• Duplicate charge implementation
• Improving the wastage system efficiency
• Negotiating prices
• Evaluation of wastage system

5. Cable Franchise Audit

Local governments require cable operators to enter into a cable franchise agreement. It permits the utilization of streets and roads of the municipality. Municipalities charge returns to cable operators but sometimes do not take the correct amount. A franchise audit helps in finding errors in the fee payments. Things looked into are:

1.  Client's franchise agreements
2.  Examination of relevant data
3.  Identify all revenue sources
4.  Examine cable operator's database
5.  Recalculate the franchise fee
6.  Issue a report explaining auditor's findings
7.  Negotiation of a financial settlement with the cable operator if necessary

Good auditing has 6 elements:

1. Systematic process.
2. Three-party relationship.
3. Subject matter.
4. Evidence.
5. Established criteria.
6. Opinion.

Choose your auditor wisely.