EXTERNAL AUDITOR:EXAMINER OF FINANACIAL STATEMENTS OF AN ENTITY
TO MAKE SURE THEY GIVE A TRUE AND FAIR VUEW AND ARE FOLLOWING THE
RIGHT REGULATIONS AND THEY ARE INDEPENDENT OF THEM SELVES.
PURPOSE OF AN EXTERNAL AUDITOR.
I To perform an opinion on whether certain statutory requirements have been compiles
by the company.
2 to report to members whether financial statements of a company give a true and fair
view
3 to give details required by statute in auditors report
4 to conider whether other information that has been published is in line with the
financial statements
True and fair view
It means that the auditor should thrive to give reasonable ,unbiased ,impartial opinion
about the financial statements that can also bring confidence to the users of the
information and using the applicable financial reporting standards .
Judgement and professional sceptism be applied as well.along side nothing but the
truth and fairness.
4 reasonable assurance is fair review that financial statements are correct because
auditor cannot give reports that are completely free from error.
Advantages of external auditor.
a
Disadvantages
6 transactions happen in the day to day activities of a business which will be reported in
the source documents to reflect as proof and record financial staments in the later stage
to determine the performance of the business at the end of the period.
7 The objective of financial statements is to provide financial information that is useful
to investors and other users in making decisions about providing resources to an entity.
Financial statements must be supported by proper accounting records to provide
evidence that they comply with financial reporting requirements, including applicable
accounting standards.
This document provides guidance to help entities to meet their statutory requirement to
keep proper accounting records, and to address emerging and persistent issues in
financial reporting.

Investors are more able to rely on the information provided

Management can verify that their systems are sound.

Management are less likely to commit fraud

The business more able to raise finance

The auditor will highlight any deficiencies in their letter to managem ent
9 Internal control are systems imposed in business to make sure that financial
staments are kept free from fraud and and other other risks restrictring organistaion of
achieving its objectives
10 MANAGERS are responsible for putting in place proper internal control systems.
11 Preventing and detecting fraud and other unlawful acts:
Even small businesses with simple organisation structures may fall victim to these
violations, but as organisations increase in size and complexity, the nature of fraudulent
practices becomes more diverse, and controls must be capable of addressing these.
Completeness and accuracy of financial records:
An organisation cannot produce accurate financial statements if its financial records are
unreliable. Systems should be capable of recording transactions so that the nature of
business transacted is properly reflected in the financial accounts.
Timely preparation of financial statements:
Organisations should be able to fulfil their legal obligations to submit their account,
accurately and on time. They also have a duty to their shareholders to produce
meaningful statements. Internal controls may also be applied to management
accounting processes, which are necessary for effective strategic planning, decision
taking and monitoring of organisational performance.
12 MISUNDERSTANDMENTS OCCUR WHEN TRANSCATION ERRORS HAPPEN ,OR
SOME GOOD ARE STOLEN THUS PRESENTING INCORECCT INFORMATION IN THE
FINANCIAL STATEMENTS.
13 ASSURTIONS VERIFY ACCURACY
AUDIT EVDIVANCE SERVES AS PROOF THAT WHAT THE CAMPANY SHOWS
REFLECTS IN THE FINANCIAL STATEMENTS