Advantages of Audit

Auditing has become a compulsory task in the business organization. All the organizations like business, social, industries and trading organizations make audit of books of accounts. Now-a-days, owner of business and its management are separate. So, to detect and prevent frauds, auditing has become essential.

Audit helps to easily enter the capital market. The public must comply with the safety communication and the requirements under it. Once the audit is completed, the audited account is easily accepted by the government, such as the central bank, public agencies. This provides a higher level of authority for the account to be authorized.

Audit helps to deterrent to fraud and inefficiency. The audits performed must be within the accounting department of the claim. If a loss occurs, the property of the maintenance fund will be transferred. If the public has a separate ownership plan, the claim must be resolved from the insurance claim.

Audit helps to maintain account regularly . An auditor raises questions if accounts are not maintained properly. So, audit gives moral pressure on maintaining accounts regularly. Then ,  audit helps to assess tax. Tax authorities assess taxes on the basis of profit calculated by the auditor. In the same way sales tax authority calculates sales tax on the basis of sales shown in the audited statement.

Beside that , audit helps to reduce capital costs. This reduces information related to financial statements related to lower interest rates and return on investment. Sometimes this activity provides a convenient settlement and partner requirements. It can be corrected on time by performing audit fraud and error processes.

Audit helps to present a proof . If any case is filed against the auditor regarding negligence, auditor can present audited report as a proof to settle such case. So, it helps to present proof to settle such cases.

Audit provides information about profit or loss. A businessman wants to know profit or loss of his business after a certain period of time. So, the owner of the business can get information about profit or loss after auditing the books of accounts. Beside that, Audit helps to prepare future plan. All the audited statements remain true and correct. Such true and correct account helps to prepare for the future plans.

Audit has auditor constructive. Constructive people make certain controversies and make clear decisions before continuing to report. It works with those who deal with stakeholders to prove the efficiency of the organization. It forces the organization to force all disputes to be resolved. It helps to quickly and collectively correct fraud and other common mistakes.

Audit helps to amalgamate the company. Sometimes, same nature of organization may be amalgamated. Auditing makes valuation of assets and liabilities which helps to amalgamate the company. Purchaser of the company can accept such business organization on the basis of valuation made by the auditor.

Audit helps to maximize profit levels of company. Auditing is called an assessment activity, which is related to the sequence of challenging environments, and it also involves conflicts that are pursued in the maximum level of profit to be achieved.

Publish By: Yong Sai Ling

Reference Link :-

Top 39 Advantages and Disadvantages of Auditing by Chitra Reddy 

https://content.wisestep.com/top-advantages-disadvantages-auditing/