What Is External Auditing?

In a company, the person who is responsible of auditing standards and procedures is called an auditor. He is aware and responsible for all the financial statements of the company. He must know how to evaluate and offer all the supervision in his field. In some countries, it is mandatory that a council should have an external audit. Usually, they are appointed by the audit commission.

The main aim of an external audit is to investigate the accuracy level of the finances in that organization. Some audits are done to know if the records are 100 percent accurate and if they have been completed, they are prepared in the correct manner recommended by GAAP, if the financial position of the company at that time fits the accounts and statements that have been provided etc. Those are mainly the reason why they have to counter check the companies financial records.

1. Audit object: It is mainly done in public institutions, large scale companies and any government based institution or company.
2. The best external audits in businesses are the financial, operational and compliance. Usually the commission sets aside millions of dollars for external audit programs although this happens in most institutions and companies. One can use the designed external auditing method to internally audit.
3. The main reason why it is done is to have to be done is to provide good management of finances and give the company a guarantee that the financial records are accurate and correct. It does not favour any side and it presents the findings as they are.
4. They are able to maintain 100 percent confidentiality. Furthermore they are not paid to inform the rest of the public the findings of a company. That is reason enough as to how they are able to audit even the government and also trade secrets.
5. A balance sheet is able to show the analysis of the financial record. This is because several things are recorded such as the money getting in, changes made etc. When it is being done, it has to be provided since it has information concerning finances. An important point to remember is that all the audits are supposed to be done according to GAAS.

All we need to know is that the coordination between internal and external audit is that their aim is to provide information that will help in improving the efficiency of the audit. Any profit making organization should ensure they conduct this once in awhile.