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1.it is a checking measure:
2.It is prevention and controlling measure
3.It is Regulatory requirement.
4.It is representative
5.it is an acknowledgement of facts and figures of the financial statements.
The audited financial statements shows reliability and accuracy of your books of accounts which help you to get loans from Banks for future investments. If it was not mandatory by law then It should be audited because of transparency.
It provides a level of satisfaction to the shareholders, creditors and other outsiders regarding the fairness of financial statements and proper maintenance of books of accounts.
I am Agree With Georgei assi answar
The benefits of the external audit:
1 Internal Benefits: The benefit of the project owners, including:
Enable project owners to know and follow the progress of work on the project.
Data that have undergone inspection and auditing valid tool to draw the plans and take appropriate action be considered.
Discover gaps and the strengths and weaknesses in the internal control system.
Irregular accounting feeling Bkhaddoahm accounting staff work to the audit.
2 Foreign Benefits: The benefit to others and rely mainly on data and accounting data provided by the accounting, which emphasizes health review which serves many of the parties that these data and accounting data used in the formulation of future subsidiary plans, these plans and remind them of the most important beneficiaries:
Investors category: all any person or entity owns capital want to invest in any suitable economic project.
Banks of all kinds: in order to know and determine the financial position of the entity as well as monkeys to pay its debts borrowed from these banks.
Men trade and economy: for advice and economic studies to choose the most appropriate economic sphere.
Financial circles: In order to determine the amounts of taxes correctly and properly.
In addition to the men of science and academics, trade unions, government agencies, and managers.
External audit provides the financial check and balance in the organization
It gives transparent accountability and audit of the all financial records of the company
External audit is more reliable than internal audit.
The purposes of external auditor are:
to give a true and fair view opinion statement on the status of a firm.
to inform the shareholders how well or otherwise their firm is run.
to pay taxes, dividends or make investment decisions.
to raise capital.
to comply with the law.
External auditor can be a very subjective process involving several factors. Auditing Standards issued by the Government Accountability Office (GAO), noted that a sound procurement practice when contracting for audit services should consider other factors besides the fee.
Public entities should select auditors only after considering the following five basic steps for an effective audit procurement process:
Step1: Planning—determining what needs to be done and when
Step2: Communicating Audit Requirements and Soliciting Proposals—writing a clear and direct solicitation document and disseminating it widely
Step3: Selecting a Qualified Auditor—authorizing a committee of knowledgeable persons to evaluate the ability of prospective auditors to effectively carry out the audit
Step4: Writing the Agreement: Documenting Expectations—documenting the expectations of both the entity and the auditor
Step5: Monitoring the Audit: Ensuring a Quality Audit—periodically reviewing the progress of the audit.
Good answers
- Availability of information needed to make important decisions.
- Have experience in similar situations.
- The possession of knowledge and skills that can be useful to the company.
agree with all answers
