What does “audit” mean and do you need it?
“Audit” means an independent assessment of the credibility/reliability/fairness of the accounting and financial statements of a given legal entity.
An independent confirmation that the numbers on paper reflect reality. It is required of companies to ensure accurate reporting to shareholders, to attract investors, to go public, and report to the tax authorities (in the cases of Statutory Audit).
An independent audit is also required in cases when conflicts and differences arise between a company’s cofounders about its business processes, or when higher management questions the accuracy of its accounting practices.
So, sooner or later every company faces the need for an independent audit of its accounting.