The external audit involves an independent resource examining a company’s financial statements. The majority of cases require external audits. A business’s condition and operations are evaluated during an external audit. In the context of an annual review or during a special review, a registered accounting firm is responsible for performing this evaluation. It is up to the board of trustees or the annual general meeting (AGM) to choose the auditors.
Independent auditors should not be personally linked to the business or involved in preparing the accounting records to be audited. Aside from independence, an external auditor should also possess the relevant professional qualifications and the reputation of the auditor, as well as their experience auditing similar businesses. Books of accounts are accessible to auditors for the purpose of gathering information and providing their opinions
There is no conflict between internal and external audits. Contrary to popular belief, they are complementary. An external auditor may use internal auditing work if it deems it appropriate, but it doesn’t reduce the external auditor’s responsibilities. An Internal Audit function ensures that the business is operating efficiently and checks its activities. However, external auditors are completely independent, as they are brought in to complete the audit. The audits ensure that the financial reports are accurate and complete.
A company’s external auditors are responsible for auditing its general ledger and making any necessary inquiries from the company’s management. The analysis provides a real-time picture of a company’s market position and financial condition, as well as the basis for managerial decisions.
The purpose of external auditors is to check the validity of financial records to determine if any misstatements have been made in the company’s record as a result of fraud, errors, or misappropriation. As a result, a company’s financial statements are perceived as more credible and authentic.
A company’s owner may not be able to make appropriate decisions if there are errors in the accounting process. Due to the procedures used in an audit, errors in the system and other fraudulent activities can be detected and mitigated to a large extent through audits. As part of the audit process, accounting transactions are also recorded according to generally accepted accounting principles. In addition, business owners can take advantage of it by covering themselves when it comes to adhering to various rules and regulations.
Taxocrate (Pvt) Ltd provides audit and assurance services to its clients. Audits provide assurance and advice to management and business process owners on how controls within the organization are working; they ensure that relevant control objectives are being met. The report also identifies areas where control systems may be inadequate, identifies the risks associated with these deficiencies, and offers management advice on how to overcome them. Our services include Company Registration, Firm Registration, Trademark Registration, Income Tax, and Sales Tax Filing.