An audit checklist is a set of procedures or steps a public accounting firm follows when auditing a company. These procedures often translate to most audits regardless of the company or business industry and sector. Hotel audits can occur on the corporate or franchise level. Many hotels use a franchise model in the business environment. Hotel franchisors use audits to ensure each franchise operates according to regulatory standards and the company’s standard operating procedures.
Auditors begin the audit process by meeting with company management. This allows the auditors to understand which type of audit they will conduct and which areas will be included in the audit. Audits typically fall under the financial or compliance designation. Financial audits include a review of the hotel’s financial statements, internal controls and accounting procedures. Compliance audits review the business operations of a hotel, which primarily includes the functions or processes outside of the hotel’s financial processes.
An audit plan outlines the specific steps or information for the hotel audit. Auditors will also create and request a sample of information from the hotel to test against national accounting standards or the company’s operating procedures. An audit time line is another feature of the audit plan; this ensures auditors will complete all functions within a certain time period and do not drag the audit on too long and hamper the hotel’s operations.
Fieldwork is where the majority of audit work takes place. Auditors will review how the hotel records income, expenses and handles its cash management functions. Hotels with gift shops, recreation centers or other facilities will also have these items included in the audit. Auditors will attempt to measure and assess how the hotel manages financial information. Auditing a hotel franchise is typically different than auditing the entire hotel operation. Franchisees usually have less information and are more inclusive than the entire corporate organization. Corporate hotel audits usually focus on corporate-level information rather than individual franchise figures.
Audits typically end with a follow-up meeting with franchise owners or corporate management. Auditors will discuss any variation or improprieties that create misstatements on the hotel’s financial or business reports. External audits will typically result in an official opinion that is released to outside business stakeholders. Internal audits report information for management use and does not usually require an official audit report unless requested by management.
