Monday, October 1, 2012

Audit Purpose and Importance



Overall Purpose of an Audit and Importance

 
 

The general purpose of an audit is to provide credibility to information.   An auditor will examine accounting records, internal controls, and other evidence that support the financial statements follow generally accepted accounting principles.  All of this information is used by the auditor to issue their opinion in the form of an audit report that will focus on whether or not the financial statements are presented fairly and in accordance with the financial reporting framework (GAAP).  This is important because the information in financial statements are used by outsiders such as; banks, individuals investing in stock, creditors, customers and other 3rd parties.  The auditor’s report provides reasonable assurance that the information in those financial statements can be believed.  (Whittington & Pany, 2012)
 
Whittington, O. R., & Pany, K. (2012). Principles of Auditing & Other Assurance Services. McGraw Hill .
 


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