External audit is a crucial component of a company's financial health. It provides an independent examination of financial statements, giving an opinion on the company's performance and financial health. External auditors evaluate the systems and controls in place to safeguard the company's financial health and ensure compliance with regulations, preventing penalties that could impact the company's financial health. Good and qualified auditors bring added value to clients by bringing accuracy to financial records and verifying that entities follow relevant financial standards. External auditors also keep an open mind to any potential weaknesses in internal controls that might result in errors, misstatements, or fraud in financial statements. Based on their findings, they develop an opinion that results in a qualified or unqualified opinion.

In summary, external audit is mandatory and effective for companies because it provides an independent examination of financial statements, ensures compliance with regulations, and brings added value to clients.

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External Audit: A Key to Financial Health