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An external audit does not provide any benefit to the company.
False
This statement is FALSE.
An external audit does provide benefits to the entity. Financial statements audited by an external auditor is more reliable and trust worthy. Only audited financial statements are acceptable to BOD, shareholders, Creditors, Banks and tax authorities.
External Auditors give reasonable assurance about the accuracy and genuiness of the financial statements by applying auditing procedures.
External audit highlights the grey areas of management role in preparation of financial statements and also gives healthy and practical recommendation. Sometimes external audit is also helpfull in the discovery of frauds and financial mistakes.
