Auditing

What Is Audit | Importance of Auditing in Business

What is Auditing?

An audit ensures that the accounts reflect the true image of the economic reality of a company. An audit is a process of analyzing the company, its finances or its operation, carried out by an independent auditor. Doing business audits can help a company to diagnose potential problems, in order to find ways to solve them.

As stated above, auditing is a process used by an executive to identify potential problems in the finances or conduct of his business in order to improve. It is therefore a question of verifying that there is no fraud or omission that could alter the economic reality of the company.

Purpose of Audit:

The purpose of the audit is to ensure compliance with documents, practices, IT systems, etc. rules and procedures. The difficulty of this work of appreciation encourages companies to call on an external and independent provider: an audit company or an auditor.

Role of the Auditor

The auditor is a trained professional who examines the accounting data provided by the audited company and verifies that this information corresponds faithfully to its activities. The work of the auditor is to write a report at the end of the audit. This document will determine the level of accuracy and clarity of the organization’s accounting.

It will verify that the accounting transactions made by the company appear in the General Ledger or the recorded transactions actually correspond to the deliveries. Audit and management control, enables the company to analyze its own practices, diagnose possible problems, and consider solutions to continue to innovate.

The importance of auditing in business

A company must ensure that its resources are used efficiently to ensure its own financial health. It is also about meeting commitments made to clients, suppliers, creditors and, if any, employees. Companies are supposed to comply with the legal rules, in particular in the field of labor law and payment of different taxes. The mission of the auditor is to provide a professional diagnosis on the financial status of the company. This report will then serve as a confidence notice for future creditors or investors of the company.

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