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Nearly every company does receive an annual audit meant for is financial statements, like the balance sheet, cash flow statement, and income statement. Additionally, lenders too habitually need the outcomes of an external audit as a portion of their debt agreements. The significance of auditing is pretty obvious and so; it doesn’t come as a surprise that students take an interest in its detailed study. 

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What is Meant by Auditing?

By financial auditing is meant the method of testing a person or an organization’s financial records for determining whether or not they are precise and according to the applicable rules that include accepted accounting standards, laws, and regulations.


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The external auditors emerge from outside the organization for examining financial and accounting records and propose an independent opinion regarding these records. Law needs every public company to possess its financial statements audited externally. The internal auditors do their job for the organization in the form of internal employees for examining records and aiding in augmenting internal processes, like internal controls, operations, governance, and risk management. The audit happens to be the critical and intelligent examination of the accounts books of business. BookMyEssay Auditing case study writing assistance turns helpful to students in various ways and so, they continue to have faith in us.

Who Does the Auditing?

Auditing is accomplished by the body of persons or the independent person who is qualified for this job with the assistance of papers, statements, comments, and information received from the concerned authorities. This is done so that the examiner can settle the financial accounts’ authenticity which has been prepared for a specific term and report which:

  • The balance sheet reveals the fair and an accurate view of the concern’s state of affairs.
  • The accounts have got prepared according to the law.
  • The accounts of profit and loss disclose the balanced and right view of the profit as well as the loss that happened during the financial period.

So, it can be said that an auditor’s job is something more compared to a simple comparison of the accounts and balance sheet with the books. However, besides doing this, an auditor needs to content himself accordance with the explanations and information which is being provided to him.

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The Kinds of Audits

  • There are three chief types of audits and they are internal audits, IRS (Internal Revenue Service) audits, and external audits.
  • External audits are usually performed by CPA (Certified Public Accounting) firms and give rise to the opinion of an auditor that is comprised in the report of the audit.
  • A clean or unqualified audit opinion is meant that the auditor hasn’t come across any kind of material misstatement due to his analysis of the financial statements.
  • Internal audits act as a managerial tool for making augmentations to internal controls and processes.
  • External audits can comprise a review comprising the internal controls and the financial statements of a company.

Why Audit is Required to be Done?

Audits are helpful to businesses for ensuring efficiency and uncovering problems. The reasons for conducting an audit are as follows:

  • Audits ensure an organization’s effectual operation.
  • Audits are important for reviewing compliance with many administrative regulations.
  • Audits help implant a feeling of assurance in management that a business has been functioning well.
  • For enhancing or maintain the reputation of the organization in the community.
  • For performing a review of “due diligence” for the potential investors or shareholders.

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