Importance of External Audits

Financial audits are crucial in businesses as they are conducted by external accountants to ensure accuracy. Internal accountants may unintentionally or deliberately make adjustments that make the financials look better than they actually are. These adjustments include rounding up revenue, rounding down expenses, postponing costs, and assuming future payments. Although initially, the numbers may appear positive, if left unchecked, this practice can lead to severe consequences such as bankruptcy and foreclosure.