Audit services (HLB)

Audit services (HLB)

In the broadest sense, an audit is a group of procedures for examining accuracy, completeness, accountability, legality and objectivity of certain occurrences and processes. Qfact is not registered for performing audit and control services, even though it counts certified auditors as its employees, but these services are performed by our partner audit companies. We point out audit services because they are complementary to consulting services and it is important to point out that audit services must be independent from most consulting services in the sense of avoiding the conflict of interest. However, auditors must cooperate with advisors and accountants in order to avoid disagreements in auditor’s opinion that can have significant consequences for the client.

Based on all that we established a close cooperation with quality audit companies, necessary for quality assistance to clients in the consulting and controlling segments.
 
 

Audit of financial statements

Most widespread and most well-known audit service are audits of financial statements. The purpose of these audits is to provide the users of financial statements (owners, investors, suppliers, creditors, employees, the public, etc.) with an opinion on accuracy and objectivity of these financial statements that are presented by governing bodies of companies and other subjects.
The law prescribes an obligation for the audit of financial statements (legally required audit) for the subjects in the Republic of Croatia as stated in the brochure. However, it is common that many users of financial statements, in order to protect their interests, demand the subject to have its financial statements audited even though there is no legal obligation. Unfortunately, many users in Croatia are not aware that the audit is a tool used to protect their interests. Considering all of that, there are deficiencies in the functioning of the system, both at the subjects that are legally obliged to have their financial statements audited and with subjects that are possible users of voluntary audit.
It is indisputable, however, that the audit of financial statements is one of basic components of a functional financial system and economy in general.

Audits in accordance with the Commercial Companies Act

Commercial Companies Act prescribes obligations for audit services in status changes, mostly for the purposes of the court register. 
 

Audit for the purposes of founding  

Carried out at the founding of a commercial company by entering items and/or rights. After it is carried out, the auditor must confirm the accuracy and completeness of the founder’s information on equity/share capital, taking over of shares and if the value of investment and takeover of items and right is corresponding to the amount of share capital/equity. This type of audit is performed in case of founding by cash inflow if one or more founders are named as members of the management board or supervisory board of the company. The competent commercial court appoints the auditor.

Audit of mergers and acquisitions

It is carried out in case of mergers and/or absorption of commercial companies. The auditor must examine the merger agreement and after the audit is carried out deliver a written audit report where it confirms the accuracy of share swap between individual companies. The situation is similar with merging of two or more commercial companies. 

Audit of divisions

Carried out in case of division of commercial company. The auditor must verify the division plan and write the auditor’s report. In case that the members of the company do not gain shares in new companies at the same ratio as in the previous company, the report must be concluded with a statement on the appropriateness of shares, taking into consideration cash payments in the plan of division or offered by a third party.

Audit of increase in share/subscribed equity

Carried out when share equity of a commercial company is increased by entering items/rights and from the company’s funds.


Inquiry of financial statements

Inquiry of financial statements or audit inquiry is a procedure with a goal of determining possible irregularities in financial statements. More affordable procedures are used that result in a smaller scope than an audit but are also less administratively demanding.
Audit inquiries are legally obligated for nonprofit organizations that have an income between 3 and 10 millions of HRK annually, and voluntary users are usually smaller commercial companies and nonprofits along with smaller state budget dependents.

Internal controller services

Internal control is a function of management that should be used by almost all subjects regardless of the legal form, orientation or ownership.
Legally obligated internal control is obligatory for beneficiaries of the state budget, nonprofit organizations and extra-budgetary users that are subject to fiscal responsibility.
Taking into consideration the lack of qualified workforce and relative cost of said experts, many subjects (especially smaller ones) find it economical to hire external controllers that will perform these services using their own software.
This service is an upgrade of our service of modeling and establishment of control systems through digital solutions - EBA and Caseware.

Agreed audit and control actions

Many subjects need specific audit and control procedures and actions regarding the specific situations and needs. These are created at their request. Most often these are combinations of services:
•    accounting control
•    control of accuracy of tax expenses
•    management audit
•    audit of operating activities
•    verifying expenses and similar.
Said services are related to the client’s needs to assess the quality of accounting, reduce tax risks, find irregularities in the management, asses certain business decisions, justify costs, etc.

»Clean« start services

When there is a change in ownership, management or supervisor (Supervisory Board), creditor or investor entry, establishing significant business relationships and similar, a need for clean start services arises
These services are created to assess the condition of the subject at the certain moment of the change. Things commonly assessed are: financial standing, legality of actions, management quality, justification of costs and performance quality.
These services are most often performed for subject owned by the government while private companies use due diligence services more often.



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