Purpose and Importance of an Audit
Why Audits Matter
Businesses prepare financial statements to communicate their financial performance and position. Because management prepares these statements, users may question their reliability. Independent audits reduce this information risk by providing an objective evaluation.
Tip
Remember: The audit opinion increases confidence in the financial statements—it does not certify that the company is financially healthy.
Summary
Audits reduce information risk and improve trust between organizations and financial statement users.