- Examination of accounting and financial records that is undertaken independently.
- Determine if the company or the business undertaking has conformed its operations to the laws and the generally accepted accounting principles.
- Identifying the areas of underperformance and those that require corrective measures
- keeping track of all your financial activities
Accounting as a field is vast and comprises many areas of specialization within its framework. specializations of Auditing While accounting deals:
- Tracking and recording of financial transactions
- Verifying the accuracy of the accounts.
- Determines the integrity of the whole accounting system of a company.
- Audit determines the causes of any problems and checks if the company has followed the laws and regulations.
- Add credibility for your accuracy.
- Seen in cause of errors in your accounts.
- Financial audits determine whether an organization’s financial statements accurately represent the results of the business’s financial operations. It makes sure that the organization’s financial position is in accordance with the generally accepted accounting principles.
- Compliance audits check if the company has functioned in accordance with the laws and regulations that may materially impact the financial statements. Financial and compliance audits are more often. However, they are not combined.
- Economy and efficiency audits measure whether a business has been economically and efficiently managing its resources. These resources could include personnel (employees), property, space, etc; in this regard. Audits have to be conducted based on the Standards set by Auditing and Assurance Standards board.