The Importance and Need for Auditing in a Business

An audit is the gathering and evaluation of evidence in regards to information used to determine and report on the degree of correspondence between information and any criteria that has been established. Criteria for evaluating information is also dependent on what kind of information is being evaluated; when a CPA firm audits a company, GAAP or IFRS may be used, but when being audited by the IRS the criteria would be the Internal Revenue Code (Arens, Elder, & Beasley, 2014 p. 4). Auditors check numbers and calculations to look for fraud, but to also ensure accuracy.

An auditor’s job description and responsibilities include: reviewing, analyzing, and evaluating processes, services, products, organizations, sys assess accuracy, reliability, and timeliness of organization information; and ensure that checks are in place designed to protect the assets of an organization (Duman, 2014).

Understanding a client’s business will give an auditor a better understanding of the documents he or she will need to look at. Different businesses will use different criteria for theiring standards and auditors have to know which standard to use.

Additionally, it allows auditors identify business risks that are associated with his or her client’s strategies, which may affect how financial statements are conducted. The purpose of auditing an entity’s financial statements is to ensure those financial statements are being conducted in accordance with the established criteria (Arens, Elder, & Beasley, 2014 p. 14-5).

References

Arens, A., Edler, R. & Beasley, M. (2014). Auditing & Assurance Services (15th Ed.). Pearson Education.

Duman, M. (2014). Examining a career as an auditor.

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The Importance and Need for Auditing in a Business. (2022, May 10). Retrieved from https://paperap.com/the-importance-and-need-for-auditing-in-a-business/

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