An external or statutory audit is a thorough examination of an organization's financial records, statements, and systems conducted by an independent and qualified auditor. The purpose of an external audit is to provide an objective assessment of the organization's financial position, performance, and compliance with applicable laws, regulations, and accounting standards. The auditor evaluates the accuracy, completeness, and reliability of the financial information, ensuring that it fairly represents the organization's financial activities. The external audit process involves analyzing financial statements, verifying transactions, assessing internal controls, and conducting substantive tests. The auditor then issues an audit report, which outlines their findings, opinions, and any areas of concern or improvement. External audits provide assurance to stakeholders, such as shareholders, investors, lenders, and regulatory authorities, regarding the organization's financial integrity and transparency. It enhances confidence in the reliability of financial information and helps identify any potential risks or irregularities that may impact the organization's reputation or operations.
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