The Benefits of Independent Finanical Audit Stakeholders

What are the benefits of an independent financial statement audit stakeholders? To understand and answer that question, the word audit has to be defined. Based on the IRS, an audit is a review or examination of an organization or individuals accounts and financial information to ensure information is being reported correctly to verify the amount of tax reported is accurate. From Wikipedia, the audit of financial statements is the verification of the financial statements of a legal entity, with a view to express an audit opinion. There are many types and components to an audit. To understand the question that was first stated at the beginning of the introduction, the role of an audit and auditor has to be explained. As well as the beneficiaries of audit must be known, who the stakeholders of an audit are and how they benefit, the stakeholders expectations, the consequences of not having an audit, the auditing process, and auditor’s independence. The sole of this paper is to un derstand what the benefits of independent financial audit stakeholders are. To start off, the definition of an audit was explained in the introduction, but there also are different types of audits and many components to an audit. One type of audit is an external audit, which can be known as a financial audit and statutory audit. It involves the examination of the truth and fairness of the financial statements of an entity by an external auditor who is independent of the organization in accordanceShow MoreRelatedThe Role Of Auditing Standards On The Agency Theory And Review Common Benefits1291 Words   |  6 Pagesabout the collapse of HIH insurance from five articles. Secondly, it discusses and highlights some ethical issues, stakeholders including the relationships between HIH directors and its auditing team, and outlines their financial and non-financial problems around HIH’s stakeholders. This report also analyze HIH’s auditing issues applying on the agency theory and review common benefits with the role of an auditing firm – Arthur Anderson in HIH’S collapse. HIH was the second largest insurance company