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What is the purpose of an accounting audit?

An accounting audit helps in the financial record-keeping process of any organization. Accounting translates the flow of money in an organization, auditing is more of a specialized service. Auditing is a kind of examination of the accounting and financial records that are undertaken independently and performed to determine if the business undertaking has confirmed its operations to the laws.

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What is the purpose of an accounting audit?

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  1. What is the purpose of an accounting audit? An accounting audit helps in the financial record-keeping process of any organization. Accounting translates the flow of money in an organization, auditing is more of a specialized service. Auditing is a kind of examination of the accounting and financial records that are undertaken independently and performed to determine if the business undertaking has confirmed its operations to the laws. 1

  2. The prime purpose of the audit is to identify all possible financial irregularities and look out for signs of potential material fraud, not necessarily that all frauds will be identified. Accounting principles allow you to create and maintain credibility with your competitors and vendors. Your financial position ultimately tells about your credit score and investors can also forecast the risk and opportunity your company could offer them. An organized auditing accounting system keeps you safe when your company pays taxes, files returns, or when it is time to claim deductions.Helps in the negotiation of mergers and acquisitions. Account audit also helps you to obtain a credit period or credit card for an extended period. Why do we need accounting?

  3. Purpose of audit on financial statements An audit report could be used for many different purposes:

  4. Maintains the integrity of an organization and if an audit finds the financial statements are true and fair, based on this information, shareholders and investors could invest in the company.

  5. Reliable and clear financial statements attract new investors and investors may check the audit report to check if financial statements are not true and fair. 5

  6. Reliable and clear financial statements attract new investors and investors may check the audit report to check if financial statements are not true and fair.

  7. To avail easy or extended bank loans, as the bank checks the financial status of the entity. Banks check the audit report to look at financial statements and sometimes request the entity to submit their financial statements along with audit reports.

  8. THANK YOU ecadema it's time (302) 446-4046 ecadema0@gmail.com www.ecadema.com

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