a review of financial statements and accounting records by an accountant not belonging to the firm.
is an audit conducted by an individual or firm that is independent of the company being audited. These independent auditors audit the books of a company generally once per year (see INTERIM AUDIT) after the completion of the company's fiscal year. Their role is to give an opinion of the financials statement's reflection of the status and operations of the company being audited. Based on what they witness during the audit they will also produce, for management and board utilization, a management letter. Although a financial statement audit is the most common type of external audit, external auditors may also conduct special purpose audits which might include; performing specific tests and procedures and reporting on the results, a less intensive review, and compilations.
A financial audit carried out by an independent auditor, separate from the organisation, which provides an opinion whether financial reports are "true and fair". External auditors may also write a management letter, which comments on important issues noted in the organisation's internal controls.
An examination and evaluation of any company's records and procedures conducted by an accounting firm not associated with the organization. Also known as independent audit. Contrast with internal audit. (1) For an insurance company, an external audit includes an evaluation of the company's financial statements; the issuance of an opinion as to whether those financial statements present fairly the company's operations through adherence to GAAP, statutory accounting, or other accounting principles; and a recommendation of changes to the company's system of internal control. (2) In reinsurance, an external audit includes an on-site inspection of the procedures, controls, and records of a party to a reinsurance treaty. Also known as due-diligence review.
A formal, independent review of an institution's financial statements, records, transactions and operations. External audits are usually performed by professional accountants in order to lend credibility to financial statements and management reports, to ensure accountability for donor funds, or to identify internal weaknesses in an organization. The external audit process is key to transparency.
When an external party examines the financial records of an organisation.