Why are audit necessary?

Audit is an independent examination of entity’s financial information in order to provide opinion on their truth and fairness.

Audit is very important to business and any entity due to the following reasons:

It help the owners of the business or organization to obtain reliable information on financial performance and position of the business or organization. This is due to the fact that auditor provides assurance on credibility of financial statements.It may help in facilitating the loans and overdraft facilities from banks since banks require assurance on the truth and fairness on financial statements before issuing loans.Audit may help the business to obtains contracts from government because many government and their entities require businesses to submit audited financial statements during tendering process.Audit help businesses to comply with laws and regulations since many countries require businesses to be audited annually.