Need for an audit, Auditing

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Need for an Audit

Whether you take an example for a modern large liability company, such we can clearly differentiate between those who control those funds the providers of funds.  The providers of funds are other third parties and the shareholders or creditors who have given loans to the company.  Those charged along with the task of controlling those funds are mostly called as management and directors.  We can also clearly see which the company has resources, and claims assets against those resources, capital and Liabilities.

A report of the directors in the form of accounts lacks credibility characterize as:

  • It may include errors;
  • It may fail to disclose frauds;
  • It could be misleading inadvertently;
  • It could be misleading deliberately;
  • It may fail to disclose all relevant information.

 


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