Why Audit Is Important

A thorough audit of the assets of a company is conducted for the purpose of determining the overall financial health and to ensure compliance with the laws. An audit is actually an “independent” examination of certain financial data of any firm, whether commercial profit oriented or otherwise, regardless of its nature or size when such an exam is conducted under the supervision of a registered public accountant.

The purpose of audits is to find out whether or not certain business activities are proper, whether they are legally permitted and are performed in accordance with relevant rules and regulations. The results of the audit will be used by the registered public accountant to determine the performance of the firm and their financial position. It will also help him or her determine whether the firm has been successful in carrying out certain business activities and whether or not they have been carried out within the boundaries of the law.

Auditing is carried out on a regular basis. It is important for a public accountant to carry out a thorough audit at least once a year. These reports are used to provide the firm with an idea of the business activities carried out, how successful the business activities have been and what the firm should do in order to become more successful in the future.

The main role that public accountants conduct is that of evaluating the firm’s financial condition and the performance of their accounts and records as well as the firm’s management practices and procedures and all other information and data that may affect the firms’ profitability. All this information helps the public accountant to conduct a comprehensive review of the firm’s finances and determine their financial health and the extent to which the firm is able to comply with the law and perform the business activities they undertake.

If a registered public accountant finds that a certain firm is financially unhealthy and cannot perform the business activities that they have been performing legally and that they are facing problems that may threaten their survival, then he or she can carry out a comprehensive review of the firm’s financial status and take remedial measures to bring the firm back into compliance with the relevant laws and regulations. This could mean a number of things; it may mean that the firm needs to make some adjustments to their management practices or methods, such as increasing the amount of profits that are earned or reducing expenses, or increasing cash flow and it may also mean that some of their accounts have to be liquidated and the money that is associated with them transferred to another account.

The financial health of a certain firm can also be assessed if the firm has been providing information and services that are required by the market and that is not required by the firm. If the firm has not complied with these laws, such as the rules and regulations regarding accounting, public reporting and tax reporting, then it could be said that the firm is financially unhealthy and could be in danger of going under and could even go bankrupt.

When the auditor’s report is given to the board of directors of the firm, the board is responsible for deciding if the audit was successful. If the auditor’s findings are positive, the board may decide to increase the profits or decrease the expenses. If the auditor’s report is negative, then the board may decide that it is time for the firm to change the management practices and methods or even liquidate certain portions of the firm or even close down certain aspects of the firm.

The purpose of a public accounting audit is to enable the company to gain a competitive edge over their competitors and to increase the companies’ profitability by being able to meet the demands of the public without having to pay unnecessary expenses and by having the firm better prepared for any future growth. The purpose of an audit is also to protect the company from being taken advantage of by fraudulent or unethical people who will use the audit process as a way of gaining advantage over the company and using it as their own personal bank. so that they can make a profit by taking advantage of the company.