What is the primary objective of conducting an external audit?

The primary objective of conducting an external audit is to provide independent assurance on financial statements. This assurance enhances the credibility and reliability of the financial statements for users such as investors, creditors, and regulatory agencies. External auditors evaluate whether the financial statements are prepared in accordance with applicable accounting standards, ensuring transparency and accuracy in the reporting of a government or organization’s financial performance.

This independent oversight is crucial because it helps stakeholders make informed decisions based on the financial information presented. The external audit process involves a thorough assessment of financial records, internal controls, and compliance with relevant laws and regulations, which collectively underpin the quality and integrity of the financial reporting.