Auditing

The majority of businesses are managed by their owners, but larger businesses often have professional managers who may or may not have an equity stake in the business; the largest firms may have shares traded on a market. Where the owners – shareholders – are wholly separate from the managers – directors – an audit gives a financial insight in to the structure of the business, setting out current and historic performance in a set of financial statements, the format of which is proscribed by the Companies Act. The role of the auditor is to review and check the draft financial information prepared by the directors, and to report to the shareholders on the probity of the company’s financial statements.