Every business encounters the need to review its financial and operational processes. Auditing is a crucial tool that helps identify weaknesses, optimize tax liabilities, and improve company management. Depending on the company's needs, goals and scale, the most suitable type of audit can be selected. Understanding the specifics of each type of audit may be challenging, but the right choice can significantly impact financial stability and business growth. What are the different types of audits, and how do you choose the best one for your company? Let's explore.
Mandatory audit
A mandatory audit is conducted in accordance with legal requirements to confirm the accuracy of financial statements
It is particularly important for medium, large corporations and companies operating in regulated industries. During the audit, an auditor examines financial records, accounting practices, and company reports to ensure compliance with established standards. A mandatory audit helps prevent penalties and sanctions while increasing investor and creditor confidence.
In Moldova, a mandatory audit is required for:
- Companies with a high annual turnover (medium and large enterprises)
- Financial institutions (banks, insurance companies)
- Public interest entities
Voluntary audit
A voluntary audit is conducted at the request of company owners when an objective assessment of the financial situation or an evaluation of business process efficiency is required.
It helps business owners gain an independent assessment of their company’s performance, leading to more informed managerial decisions.
A financial statement audit, on the other hand, is essential for verifying the accuracy and reliability of accounting data, as well as assessing compliance with international and national standards. This type of audit is particularly important for companies planning to attract investments or expand into international markets. During the audit, the auditor reviews accounting records, financial statements, and the company’s accounting policies, identifying potential errors and discrepancies.
This audit is useful for:
- Evaluating the financial position
- Identifying potential risks
- Analyzing the current state of accounting
- Preparing the company for expansion or mergers and acquisitions
- Preparing for investment attraction
- Optimizing business processes
- Obtaining loans
- Preparing for external audits
The audit results can serve as a foundation for adjusting financial strategies and improving managerial accounting.
Tax audit
A tax audit focuses on verifying the accuracy of tax calculations and payments, as well as ensuring compliance with tax regulations.
The audit examines tax returns, accounting records, and financial transactions.
This audit is especially beneficial for:
- Identifying potential tax risks
- Preventing tax penalties
- Optimizing tax liabilities
It is recommended for companies that want to avoid unexpected claims from tax authorities and improve the transparency of their financial reporting.
We offer audit services to help you identify risks, improve financial transparency, and ensure compliance with legal requirements. Our experts conduct a comprehensive analysis of your company and provide recommendations to enhance financial processes.
Internal audit
An internal audit is a self-assessment process conducted within a company to evaluate the effectiveness of its financial, operational, and management processes.
It helps identify weaknesses, reduce fraud risks, and optimize internal controls.
It can include an analysis of human resources policies, managerial efficiency, and compliance with internal regulations.
Internal audits are particularly valuable for large organizations where continuous monitoring of various departments is required to prevent financial losses.
Operational audit
An operational audit is aimed at evaluating business process efficiency, identifying unnecessary costs, and improving operational performance.
The audit examines key processes, resource management, and organizational structures. This type of audit is especially useful for companies looking to reduce costs and improve productivity.
It is recommended for:
- Manufacturing companies
- Retail businesses
- Logistics organizations
Based on the findings, recommendations are developed to optimize business operations, increase production efficiency, and enhance service quality.
How to choose the right audit?
Selecting the appropriate type of audit depends on several factors:
- Legal Requirements – In Moldova, mandatory audits are regulated by Law No. 271 of December 15, 2017, on the Audit of Financial Statements. It applies to medium and large enterprises, as well as public interest entities. The type of entity is determined based on the size of the share capital, total revenue, and number of employees. Failure to comply with mandatory audit requirements may result in sanctions from the authorities.
- Business Goals – The type of audit depends on the company's objectives. If the goal is to minimize tax risks and ensure legal compliance, a tax audit is required. To improve operational efficiency and reduce costs, an operational audit is necessary. If the company seeks investments or plans to work with financial institutions, a financial statement audit is essential.
- Company Size and Industry – Large corporations require internal audits for ongoing monitoring, while small and medium-sized businesses often use voluntary audits to identify financial issues and improve financial management.
Evaluate, analyze, improve
Auditing is an essential tool for improving business operations, identifying weaknesses, and enhancing financial stability. Choosing the right type of audit helps increase financial transparency, reduce risks, and optimize company management. If you need help selecting or conducting an audit, our experts are ready to provide professional support.