Understanding Audits and Reviews
Audits and reviews are critical components in the financial landscape. They provide a reliable and unbiased source of financial data. This is particularly important for shareholders of publicly traded companies, who may not be directly involved in managing or governing the companies they own.
Who Benefits from Audits and Reviews?
The beneficiaries of this financial information extend beyond shareholders. Other stakeholders, such as creditors, lenders, employees, analysts, potential investors, regulators, governments, and communities, also rely on this data. This information helps them make informed decisions about their relationship with the company.
Enhancing Credibility through Audits
Audits play a significant role in enhancing the credibility of financial statements. They provide a reasonable level of assurance about the accuracy of these statements. This assurance is crucial as it helps stakeholders make informed decisions about investing, divesting, lending or entering into contracts with the company.
Mandatory Audits in Malaysia
In Malaysia, it is mandatory for listed companies to have their financial statements audited annually. This requirement ensures that stakeholders have regular access to reliable and independent financial information. It also promotes transparency and accountability in the business sector.
Conclusion
In conclusion, audits and reviews are vital tools in providing reliable and independent financial information. This information is crucial for various stakeholders to make informed decisions. In Malaysia, conducting an annual audit for listed companies is not just a good practice but a legal requirement. This practice enhances the credibility of the company and promotes trust among its stakeholders.
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