Question

Auditing is a systematic process of (1) objectively obtaining and evaluating the evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and (2) communicating the results to interested users. Thus, understanding of auditing improves the decision-making abilities of accountants, consultants and business managers by providing a framework for evaluating the usefulness and reliability of information, which is an important task in many different contexts.Explain?

Answer 1

Auditing is a systematic process which helps in providing the true and fair picture of the financial position of Corporations. Auditing process can be done by both Internal as well as External auditors for the Company. It involves critically examining the evidences and forming an opinion thereon. The opinion stated in the audit report is referred by many of the intended users which includes shareholders, creditors, bankers etc.

Due to the overall auditing process, decision makers can easily make a decision to run the Company. It places an correct financial image of the Company in front of the decision makers. Further auditing process ensures best corporate governance practices and displays adequate disclosures in the financial statements. This helps in overall improving the quality of the processes and achieving organizational objectives. Thus this process is a important task and has many benefits for its stakeholders and public at large.