Can you explain why companies need to be audited?

Companies generally need audit of their financial statements due to adherence to regulatory requirements. Moreover, accuracy and reliability of financial information can be substantiated through audit procedures. 

Companies need to be audited for several key reasons, ranging from compliance with legal and regulatory requirements to improving stakeholder confidence and organizational performance. Most jurisdictions have laws outlining mandatory audits for listed companies or companies in specific sectros. Here’s a breakdown:

• Statutory Requirement: In many jurisdictions, companies are legally required to undergo audits to ensure that their financial statements comply with accounting standards and laws.
• Tax Compliance: Audits verify the accuracy of financial records submitted to tax authorities, helping ensure compliance with tax laws and minimizing disputes.

• Reliability of Financial Statements: Audits provide an independent evaluation of a company's financial records, ensuring they are accurate, complete, and free from material misstatements.
• Fraud Detection and Prevention: Regular audits help identify potential fraud or mismanagement, acting as a deterrent for unethical behavior.

• For Stakeholders: Shareholders, investors, lenders, and other stakeholders rely on audited financial statements to make informed decisions about their investments or relationships with the company.
• For Customers and Suppliers: Audited accounts can strengthen trust and enhance the company's reputation with external partners.

• Risk Management: Auditors often identify weaknesses in internal controls and processes, providing recommendations for improvement.
• Operational Efficiency: Audit findings can highlight inefficiencies, helping companies streamline operations and enhance performance.

• Investor Confidence: Audited financial statements demonstrate financial transparency and stability, making it easier to attract equity investors or secure loans.
• Due Diligence: Audits are often required during mergers, acquisitions, or other significant transactions to verify the company's financial health.

• Transparency: Audits reinforce good governance practices by ensuring the company is accountable to its stakeholders.
• Ethical Practices: They promote a culture of integrity and accountability within the organization.

• Accurate Data: Audited financial records provide management with reliable information to make sound strategic decisions.
• Financial Planning: Audits help ensure accurate financial forecasting and budgeting.

In summary, audits play a crucial role in ensuring transparency, reliability, and efficiency in a company's financial and operational processes, ultimately fostering trust among all stakeholders.

AUDIT in Need to be examines and assesses company records, workflows, systems, and processes. They analyze company records and financial documents. Through the internal audit function, teams will identify issues like compliance concerns, complete risk assessments, investigate internal or external fraud, and sometimes identify data inaccuracies in financial reporting