What is the purpose of an audit?

Purpose of Audit

The main purpose of the audit is basically to examine the financial statement of a company or a business entity. The audit is carried out by a third party which examines the financial statement.

Audit Firms in UAE

Audit firms in Dubai are the ones that carry out the audit. The auditing firms in Dubai have the best auditors who examine the financial statements of the entities.  Audit firms have all the knowledge regarding auditing and they assist the entities.

During the process of audit, the financial statements are examined which is referred to as the audit opinion. The opinion is about the fairness of the statements.

The opinion that is formed plays a great role in the credibility of the person because it helps the people in getting more funds for their business and much more.

As Farahat & Co. explain the basic objective of an audit is for the auditor so that they can form an opinion regarding the financial state of the business entity. The opinion is formed on the basis of the financial statement rater it is fair or not.

Accountability

Financial statements provide the accountability to the auditor regarding the managerial process. This is because the larger firms do not form their financial statements on their own. They have employees who do that. on the other hand, the smaller firms carry out all such processes with their own hands. This is why there is some sort of difference between both of them so the financial statement provides a means of accountability.

Reliability

The external audit helps the users in placing their reliance on the financial statements. Here are the examples of those stakeholders who have a reliance on the financial statements;

Tax Authorities

They are the ones that rely on financial statements that are audited in order to determine tax returns filed by the companies are accurate or not.

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Financial Institutions

They require audited accounts of prospective borrowers so that the credit risk can be accessed by analyzing the position of liquidity and finance.

Management

It is the one that uses the audit processing so that the re-evaluation of the risk management of the company can be carried out. the internal control system is also evaluated so that the feedback can be generated.

Scope of audit

To assure the people regarding the accuracy of the financial statement, the audits are carried out. this helps the auditors in generating an opinion regarding the financial statement. It is to be made sure here that the assurance given by the auditors is reasonable and not absolute. This is the reason why the audit doesn’t show that the whole of the financial statement is free from any misstatement. The audit saves the time and money.

Limitations

There is a certain limitation in everything and same is the case with the audit. The auditor cannot give the assurance regarding the audit in an absolute manner which limits its scope.

Auditors in UAE

Auditors in Dubai, UAE and can give you all the information regarding the procedure of audit without any difficulty. So, if you need them, do consult them.

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