Financial Audit
Ever since its introduction, audits have become a constant recurrence throughout a corporation’s lifespan.
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Financial Audit
The need for companies’ financial statements to be audited by an independent external auditor has become a cornerstone in today’s financial system. The objective of any financial statement audit is to allow for transparency into the corporation’s financial health and to ensure there are no misappropriations.
When a company has to go through the auditing process, an auditor may use the term “audit engagement” to describe the process. This can mean a few different things, so it is important that the auditor or Chartered Accountant clarify what he or she means when they use the term. Specific procedures and guidelines are followed throughout an audit engagement, and the true aim of the audit is to provide reasonable assurance to the shareholders and stakeholders that a true and fair view of the company’s financial performance has been presented. This allows for an enhanced degree of confidence in a company’s performance, and thus audits are preferred by shareholders, governments, banks, and other creditors. Therefore, such audits are required by federal and provincial legislation in Canada.
Other common engagements that provide similar reasonable assurances include:
● Operational audits
● Comprehensive audits
● Internal audits
● Compliance audit