American businesses
American businesses, just like any other businesses, carry out various financial operations to ensure that the company remains afloat. These operations include financial transactions such as revenue, payroll, and expenditures. The businesses have to keep accurate records of these transactions to ensure that the funds are correct and there is no misappropriation of funds. Auditors are, therefore, vital for the businesses as they encourage accountability. The auditors ensure that the company maintain accurate and truthful records and reports of the financial operations. Understanding the role of auditors is essential as they play a significant role in the American business.
Businesses are the core of the American economy as they bring about employment and revenue in various forms, including taxes. Large corporations often have internal auditors whose primary duties include reviewing ns assessing the financial records, systems of accounts and the organization’s compliance with company policies and the country’s financial regulations such as tax compliance. Internal auditors are quite essential and advantageous to any organization as they are proactive in finding any forms of noncompliance or errors early. This efficiency ensures that organizations can resolve any issues before they become severe and affect the organizations in other drastic ways. These internal auditors provide corrective recommendations, and they alert the management on any risks or failures that they detect. The auditors are, therefore, a powerful and essential tool for management as they improve efficiency and effectiveness for the businesses. Most of the corporations that have seen massive growth in the country have reliable auditors who report to the directors and top management. They create a sense of accountability on all employees, especially those in the finance department.
External auditors, on the other hand, share similar duties as those of the internal auditors. However, external auditors are autonomous in that they do not have any links with the organizations. This lack of links ensures that the auditors are not biased when going through the records and can provide the reports needed accurately. The auditors are as reliable and relevant to decisions in investments. They give investors who are uninformed the confidence and assurance to participate in the stock markets, which is a highly pertinent and significant form of investment in the American economy. Auditors can restore the public’s confidence in the capital markets, creating a platform for private enterprise to participate in capital formation. This confidence is because the audit reports often give a clear view of the financial situation of the public traded companies. The U.S Securities and Exchange Commission requires publicly traded organizations to have their financial records regularly audited by external and independent auditors. The auditors ensure that the organizations follow the Generally Accepted Accounting Principles (GAAP).
Apart from checking the financial statements for accuracy, auditors also review the accounting procedures to ensure that companies follow the necessary steps to prevent fraud. This review means looking at the organization’s process of signing checks, making payments and the process of handling deposits. Auditors also ensure organizations follow the right procedures in terms of people who have access to funds.
Auditors are an essential part of American businesses and the American economy. Auditors have the ability in ensuring that more investors take part in trading in the capital markets. The auditors also provide that organizations can prevent fraud and maintain accurate financial records. Having internal auditors may seem beneficial for the organizations, but for publicly traded organizations, external and independent auditors are recommended. Auditors are responsible for ensuring organizations operate efficiently