## Benefits and Need of Audit
Audit serves multiple stakeholders beyond just management. The key benefits are:
### 1. High Quality Information
Audited accounts are the outcome of an exercise carried out following globally recognised Auditing Standards. Users can rely on this information with confidence.
### 2. Protecting Shareholders' Interests
In companies, shareholders (owners) are often not involved in day-to-day affairs. Financial statements are prepared by management (directors). Audit provides an independent mechanism ensuring financial information is qualitative and reliable — safeguarding shareholder interests.
### 3. Moral Check on Employees
Audit acts as a deterrent — employees are less likely to commit fraud knowing that accounts will be independently examined and fraud may be discovered.
### 4. Tax Determination
Government authorities rely on audited financial statements to determine tax liabilities accurately.
### 5. Credit Decisions by Lenders
Banks and other lenders rely on audited financial statements when deciding whether to extend credit to an entity. Unaudited statements may not inspire confidence for loan approvals.
### Memory Hook — HMTLC
- High quality information
- Moral check on employees
- Tax determination
- Lenders' credit decisions
- Confidence to shareholders