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A fiscal audit is just one type of financial audit that helps businesses, governments, and other parties to provide proof of solvent accounting standards and financial health, as well as maintaining good internal record keeping protocols. The financial audit is a major part of financial security in many markets, nations, and regions of the world. Each nation has its own rules on the necessity and standards for a financial audit.
There are many different forms that financial audits can take. Some are performed by internal auditors who focus more on the workings within the company. Others are done by external auditors and take more of a critical approach.
A fiscal audit is a type of financial audit that applies to fiscal year accounting. Governments of various countries allow businesses to account for their finances not through a calendar year, from Jan. 1to Dec. 31, but through a fiscal year that has a different starting and ending date. For example, in the United States, a common fiscal year starts on October 1, where in the United Kingdom, many businesses are allowed to use a year from April to April.
Either a business or government entity may find a fiscal audit to be an effective monitoring tool. The fiscal audit and fiscal accounting structure can allow for more favorable tax results according to a national tax code. It can also help specialized larger entities to manage costs or revenues that form around a different fiscal time period rather than the traditional calendar year.
Some types of professional accountants are likely to be involved in various financial audits, either as staffers of a company, or as outside consultants or specializing auditors. A Certified Public Accountant or CPA might manage a fiscal audit along with many other financial roles. Other “general” or “charter” accountants might also be involved in fiscal audits.
It is necessary for a fiscal audit to be focused on keeping the business or other entity in compliance with all national financial rules. For example, in the United States, relatively new accounting legislation called Sarbanes-Oxley covers many requirements for a fiscal audit or other type of annual audit. The tax and accounting law of a specific country will affect how finance professionals inside of that country build their own “audit templates” or proprietary methods for offering companies a chance to engage in comprehensive annual audits of their entire corporate finance situation.