Business is all about credibility and no sensible businessman would want to deal with a company which does not possess a credible reputation in the market. A good opinion from a reputable auditing firm can reflect positively on a company's standing in the field. This is primarily the reason why audits are done by outside firms. Audit reports can be accessed by employees, business partners, financial institutions, banks, customers, material providers and others. It is only through an audit that a company can catch accounting errors.
Structure of auditing
Audits are usually done at the end of the fourth quarter of a fiscal year, reviewing how the business was operated in the previous 12 months. The nature of the business, the way it is being administered and the industry regulations are taken into account while auditing. The internal control systems of a company are a thoroughly examined by the auditors to test their accuracy.
Goals of a company
Every organization or a company sets different goals for itself, which are assessed and revised each year. An audit report plays a crucial role in achieving those goals and helps the top management take steps in the right direction.
Auditors also examine the time taken to complete projects because if a company is taking more time to complete a project, it naturally means that more resources have been spent. Therefore, an efficient audit report helps the management evaluate the performance of their company and how they need to improve.
While running a business, you often have to deal with third parties. Through an audit, you can scientifically assess the performance and the credibility of the vendors.