Have you ever wondered if an accountant were to make a mistake would anyone know? No one would want financial statements or records that were not accurate right? Did you ever think that an employee could be dishonest and get away with it? Maybe it is possible, but this is supposed to be checked on. There are various specialized areas of accounting (“Accounting and Bookkeeping” 1). Auditing happens to be one of those specialized areas. Auditing is important and should be done.
Auditing is when the financial records and statements are examined and verified for accuracy (“Accounting and Bookkeeping” 1). Not just anyone can audit financial records and statements. “Audits are carried out by suitably qualified auditors who are employed to scrutinise the accounts of business entities including limited companies, charities, trusts and professional firms.” (Gillespie, Lewis, Hamilton 281). These auditors are called CPAs which mean Certified Public Accountants (“Accounting and Bookkeeping” 1). “All companies with the exception of certain small companies, are required by law to have their accounts audited annually by a professionally qualified auditor” (Gillespie, Lewis, Hamilton 281).
There are advantages of commissioning an audit even if it’s a small company it maybe a good idea to still do one. A couple advantages of commissioning an audit are as follows: If an account is audited it will carry more weight with tax authorities than one that is not audited. There may be disputes between partners and managers about certain accounts, but if it is audited it is easily solved. Last but definitely not least dealings with banks could be improved (Gillespie, Lewis, Hamilton 281).
An auditor examines accounts with detail by receiving an amount of checks on figures to make sure that the financial statements show a fair view of the firm’s financial position at the end of the period (Gillespie, Lewis, Hamilton 281). Once the auditor is done... [continues]
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