Essay On Types Of Audit

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What is Audit? Types of audit.

Audit is an examination or evaluation of a process of financial statements which are checked and defined for reliability and accuracy these documents. The audit provides the important accounts date about a conduct of the company not only for first-party audit’s benefit but also for outside agent (for customers, creditors, shareholders or another organization). Audit searches the issues of records, income statement, balance sheet and cash flow in order to determine the risks of business and moreover, helps to remove any slopes. As it was mentioned, there are different types of audit: internal and external (first-, second- and third-party audits).

A first-party or internal audit is designed to look for strengths …show more content…

An external auditor is from an independent firm which is hired by shareholder vote. The external auditors provide full evaluation, using specific formats for their audit, to investors, creditors and to participants who are somewhat connected to the specific business. Auditor has evaluated company’s financial situation and if the whole dates would be accurate it gives more benefit for owner of the company. The reason is that financial statement is more reliable when it checking by the external auditors and when it is absolutely …show more content…

Oftentimes, occur the situation when the documents are consisted of falsification. It means that the dates are not correct, in other word, are fake in order to company’s favor to show the profit too much or less depending the situation. All these problems and mistakes auditors clarify and prevent from prospective issues.

What are the main goals/aims of Audit?

By virtue to the report of auditors it can provide an objective conduction of the company. The essential purpose of audit is to evaluate the financial documents properly and to understand the weak sides of the condition of the company by conducting those fair and accurate operations. Most of the companies hire the independent auditors instead of their own internal auditors for reason to avoid any conflicts with third-party organizations. There are multiple goals of making the audit during the existence of business.

The larger of organization the more it should be checked and kept up the dates in accuracy and in good trim. It generates to ensuring accountability where company knows how much capital they have or how much they spend on some

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