Explanation

An audit is important for:

• Detecting fraud: Audits help identify and prevent fraudulent activities, such as embezzlement or financial statement manipulation.
• Improving financial management: Audits evaluate the effectiveness of financial controls, identify areas for improvement, and provide recommendations for enhancing financial management practices.
• Complying with laws and regulations: Audits ensure that financial statements are accurate and comply with relevant laws, regulations, and accounting standards, such as GAAP or IFRS.