An audit protects the interests of the shareholders who are separated from the management of the company. This is especially the case for minority shareholders who have little say in the management of their company.
- An audit being an independent examination of the financial statements gives credibility to the financial statements. The various users can therefore place reliance on them.
- The auditors experience will enable him to make recommendations on ways of improving the accounting and the internal control system.
- An audit assists in the prevention and detection of errors and frauds through the moral and deterrent effect.