Audit Essay Example | Topics and Well Written Essays - 2250 words - 2

Audit - Essay Example Auditing procedure is also applicable in case of stock and inventory management because this is also an area where high chances of corruption take place. Many organization has own internal audit department by which the company can control and monitor business activities after certain period or as and when necessary. External auditors will generally visit any company once in a year to provide more biased free judgment about the financial position of the company. Independent reports are required by auditor to increase the faith of stake holders on the company’s activities and attract more amount of capital for the purpose of business. For the above mentioned reasons rotation of auditors are also important which is recognized as precaution to save the interests of all the parties who are related in the business activities. Auditor rotation also can be said as independence of auditor and this method can be applied on both internal and external auditors. At the time of conducting audit of any particular company day after day or year after year then he will get information about all the strategies the company has taken or will going to take. They can make friendly relationship with the management and employees of the organization which will affect to provide unbiased opinion about the current condition of the company (Loughran, 2010). So this is clear that auditor rotation is required for the independent opinion of auditors. There are generally 3 types auditor can be observed. These are external audit, internal audit and audit committee. In case of internal auditor independence means bias free opinion from those parties whose interests may be affected by the audit operation or the disclosure of auditor’s report (Clayman, Fridson and Troughton, 2012). Poor governance, inadequate risk management, inadequate internal control etc. are few reasons where