Audit accounts

• Overall

  In all activities of a business, the goals of the business remains paramount

  The audit is an independent check of the accuracy of financial records and accounting procedures, and it has an important role in this process

  The purpose is to obtain an independent opinion on the financial statements of a business and to ensure the records provide accurate information for users

  They establish whether the financial statements are fairly presented and in accordance with generally accepted accounting principles
• Internal and external audits

  In small businesses, external auditors are usually only used if the business is for sale or as a check against theft or fraud

  In external audit, the business’ finances are investigated and authenticated, being presented with a statement indicating its accuracy

  Internal and external audits assist in guarding against unnecessary waste, inefficient use of resources, misuse of funds, fraud and theft. Auditors check the control procedures of a business by physically checking assets
• 3 types of audits


  Internal audits → internal by employees to check accounting procedures and the accuracy of financial records

  Management Audits → conducted to review the firm’s strategic plan and to determine if changes need to be made regarding HR, production and finance

  External audits → under the corporations act 2001 (Clth), when a company becomes a large proprietorship they must have their annual financial report audited