i.Identifies Weaknesses in Internal Control
An external auditor is not only tasked with verifying that a company’s financial information is correct, but that the process used to report and compile the financial information has enough internal controls in place to reduce the chance of misreporting or fraud.
ii.Lends Credibility to Financial Statements
Financial statements that have been audited and verified by an external auditor are considered more reliable in the business marketplace than those that have not. Lenders, investors and potential clients often require externally audited financial statements before making the decision to work with a company.
iii.Unbiased, Expert Recommendations
External auditors are trained specifically to focus on tightening and improving business processes to reduce the amount of risk of misreporting financial data. An external auditor does not bring individual likes and dislikes to the job, such as personnel favorites or aversion to change.
kevinnyabute answered the question on March 6, 2018 at 08:00
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