The purpose of an audit is to confirm the validity of financial statements and help determine the value of an organisation. The auditor’s role is to express an objective opinion on whether the organisation’s management has fairly presented the information in financial statements. Investors, partners, and customers will make decisions based on the auditor’s review, so it’s critical that the review be based on accurate, complete, and comprehensive information.
One of the ways to ensure the quality of the audit is to diligently oversee the external auditors. It is the organisation’s responsibility to provide reliable information as a basic prerequisite. At the same time, it is essential that the auditor presents a fair and balanced view of the organisation so that all stakeholders, including investors, the public, and the organisation itself, can have confidence in the organisation’s value.
Some organisations prefer to rotate the external audit firm to get more value from the audit process. This is an accepted approach, but firm rotation alone will not achieve the desired objectives, particularly if rotation takes place among a small number of firms.
Organisations will get more value from their audit if the board is more involved.
The internal audit committee must take ownership of the process to ensure that the outcome is a conscientious, independent, accurate audit.
Audits cover a much broader range of issues than simple financials. The audit should consider a holistic view of the company’s health, including specific feedback on areas such as going concern, impairment assessments, inventory valuation, and intangible assets.
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