Financial audits are an essential part of ensuring your company's control over your accounting system, financial statements and records are correct and complete. These audits can be done by an external or internal auditor. Auditor reports are mandatory for the majority of government documents. They offer investors confidence that the financial data is authentic. They also aid in preventing fraud and theft. They're a vital element of the Sarbanes-Oxley Act, which imposes strict rules on publicly traded firms and auditors on record-keeping requirements. Audits are typically conducted annually and look into a company's accounting records and internal controls policies accounts for cash and other financial aspects. The auditor will go through and gather all information as well as documentation from various departments of your company in the course of an audit. This includes balance sheets , tax returns, income documents as well as invoices, accounting procedures, and account balances.