What is an independent audit?

Independent audit is an external accounting function performed by a public accountant or private certified accountant (CPA). Audits are usually an objective review of the company's financial information. Two types of audits can be used in the business environment: internal and external. Internal audits are usually carried out by the company's employees for management purposes. External audits are usually an independent audit performed by an individual outside the company to provide an objective view of the company's financial accounting process. The development of the independent audit process appeared after large accounting scandals were discovered in the business environment. Independent audits can perform a number of organizations. Government agencies can carry out independent audits with other government entities or private societies. These audits ensure that organizations adhere to specific regulations or laws imposed on their business operations. Dent's independites also gained importance after significant financialTuaci in the business industry. Examples of these situations are great depression or recently the main accounting scandals at the beginning of 2000.

In 2001-02, it was found that the main companies such as Enron, Worldcom and Sunbeam manipulated significant parts of their financial information. In the case of Enron, the public accountant and auditor of Arthur Andersen was determined to have an inappropriate relationship with Enron. Arthur Andersen offered general accounting, counseling and audit for his accounting functions. Federal regulators found that Arthur Andersen was unable to provide an independent audit for use by external stakeholders of ENRON's financial information due to a close professional relationship and more accounting services to B.Y Arthur Anderson.

In the United States, the Sarbanes-Oxley law of 2002 limited the number of accounting functions that a public accountant was offered by a corporate client.A significant change in this congress legislation was the fact that publicly held corporations could not use the same public accountant for the general accounting services and the independent audit of determination to published investors. While public accountants could offer internal audit services for management, official audit views issued for external purposes are not allowed.

Companies after the standards of international financial reporting (IFRS) may be subject to independent audits based on the application of these accounting standards to foreign entities. Independent audits carried out on foreign companies can also follow the audit instructions prepared by the International Audit Committee (IAPC). The rise of international audit standards and growing auditugulation in the United States has significantly changed accountant and audit profession.

changes in traditional audit services in the accounting industry have increased business costs for companies operating in the business environment. SpolMultiple accounting companies can now be obliged to use more accounting companies depending on the type of service. Failure to comply with an independent relationship with external auditors can lead to significant financial sanctions for the company and the abolition of the public accounting company's ability to audit publicly held companies.