Main advantages or benefits of auditing can be highlighted as follows:
1. Detection And Prevention Of Errors
Auditing identifies accounting errors and frauds in the books of account and helps to prevent such errors and weakness in the accounting process.
2. Helpful In Obtaining Loan
Audited reports of previous period are required to obtain loan from banks and other financial institution. So, audit is helpful in obtaining business loan.
3. Accessing Tax Liabilities
Audited reports are easily accepted by tax authorities. So, audit is useful to access tax.
4. Maintenance Of Account
Regular auditing gives moral pressure to the employees of the accounting department. It helps proper maintenance of books of accounting. So, audit is very helpful for up-to-date accounting.
5. Increase Goodwill
Audit helps to increase goodwill of the firm. It also helps to increase public image.
6. Easy Comparison
Auditing facilitates comparison of accounts of different periods which helps the management to know the current position of the business.
7. Increase Operational Efficiency
Valuable suggestions and instructions provided by the auditor helps to increase operational efficiency of the business.
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8. Helpful In Future Planning
Audit helps the management to make future plans and policies. Past audited statements are useful in planning and decision making.
9. True Profit Or Loss
Auditing helps to disclose true profit or loss of the business by which the management and other users can know the financial position of business.
10. Claim Settlement
Audit helps to settle claims (retirement or death) among business partners.
