The Role of Audit in a Company

The Faculty of Economics and Business Alma Ata –

One way to understand a company’s financial condition is by reviewing its financial reports. Financial reports also play a crucial role in decision-making for the company and its stakeholders. This means that financial reports must have accountability and relevance. To achieve this, someone must ensure accuracy, fairness, and provide assessments and analyses of the activities that have been conducted. This process is known as an audit.

What is an Audit? According to the American Accounting Association’s Committee on Basic Auditing Concepts (Auditing: Theory and Practice, 9th Edition, 2001:1-2), an audit is a systematic process conducted by an independent party to gather and evaluate evidence objectively about economic activities, with the goal of determining whether the statements presented comply with established criteria.

What is the Function of an Audit in a Company? In a business context, an audit is commonly known as an internal audit. Internal audits aim to establish good corporate governance, which means a company that is transparent, accountable, responsible, independent, and fair. Audits are crucial for businesses as they provide a reliable means to assess the fairness of financial reports and offer analysis and evaluation of the company.

Source:

• https://www.freepik.com/free-vector/tiny-people-auditors-accountant-with-magnifier-examination-financial-report-audit-service-financial-audit-consulting-service-concept_10783786.htm#fromView=search&page=1&position=7&uuid=ee79002d-1c25-4956-afbd-f9830462405d