The primary objective of an audit of financial statements is to enable the auditor to express an opinion whether the financial statements are prepared, in all material respects, in accordance with an identified financial reporting framework. (Financial reporting framework refers to the international accounting standards, provisions of the companies Act and other relevant statutes and legislation). The auditor expresses an opinion as to whether the financial statements give a true and fair view of the financial position and performance of the company.
- To give credibility to the financial statements. This arises from the fact that the accounts have been subject to an examination by an independent person.
- An audit may assist in the prevention and detection of errors and frauds.
- The auditor’s experience will enable him to make recommendations on ways of improving the accounting and internal control system.