••Dispute resolution. A partnership business with a complex profit sharing agreement may require an independent examination of those accounts to ensure accurate assessment and division of those profits.
•• Significant changes in ownership and structure can be easily effected if past accounts contain unqualified audit reports. E.g. in mergers.
•• Auditors have access to the corporate strategy of the company thus are able to give advice on gaining competitive advantage and on improvement of business efficiency.
•• Borrowing of finances from third parties is enhanced with availability of unqualified audit report on the company’s financial statements.
•• Auditing protects the interests of the shareholders who are separated from the management of their savings invested in the company.
•• Auditing assists in prevention and detection of fraud and error in financial statements although this is not the primary objective of an audit.
Wilfykil answered the question on April 11, 2019 at 06:09
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