At the end of the Lecture you would be able to answer : External Audit , Objective of the External Audit, Need of External Audit, Accountability, Stewardship and Agents, statutory and non-statutory audits, Their advantages, .
External audit is the independent examination of financial report as prepared by the organisation which is accountable for the authenticity of any organisation. The basic objectives of the External Audit: 1) To enable the auditor to express an opinion. 2) To give a reasonable assurance. 3) The owner of the organisation or the shareholders of the organisation hire the external auditor. The high corporate financial scandal and frauds lead to emergence of the audits. The directors has to justify the accountability of their action towards the organisation. Stewardship are the duties and obligations of a person who manages another persons property . Wherein the director is just considered as the agent between the owner and the auditors who plays a dual role by managing the business and maximizing the business. The audits are further classified as statutory and non-statutory. Statutory is required in most countries and in entities including charities, investment businesses, trade unions. There are various advantages of the statutory and non- statutory audits. Then you will come across the term Assurance Provision, the one who is the professional auditor. Then elements of an assurance engagement. You will these elements through the term 'CREST'. You will thoroughly understand the concepts. You will get various magnificent tips to crack the exam.