The Importance of External Auditing
An external audit is an independent review of a company’s financial statements that provides transparency and evokes confidence in shareholders that the company is being run in their best interest.
Speaking on this week’s episode of ECCB Connects, Head of Audit Quality at BDO Eastern Caribbean Saint Lucia office, Andrea St Rose, says that an external auditor operating within the ECCU region must possess certain qualifications before engaging in the auditing process. The auditor must be licensed by the Institute of Chartered Accountants of the Eastern Caribbean region and must adhere to the International Standards on Auditing and Quality Management for the conducting of the audit.
St Rose outlines the process of preparing for and conducting an audit which involves the planning of an engagement with the management and governing body of the company as well as an understanding of the internal controls that are in place. She further notes the importance of the company establishing a timeline with the auditors of the various activities regarding the process. She highlights the fact that any significant changes in the business during the audit period should be brought to the immediate attention of the external auditor.
St Rose re-emphasises that planning and constant communication were important factors in the conduct of any audit to ensure success for all the stakeholders involved. In addition to this, she says that compliance with financial regulations is the main benefit of auditing to a firm; and the main benefit to a customer is that level of comfort provided for their investment in a safe and healthy company.
