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The external audit is the process of a competent independent third party, the external auditor, independently evaluating the company's financial accounts. Auditors examine the transactions and balances of the company's accounting records to see if they are complete and accurate in this scenario.

As a result, auditors express their opinion on whether the company's financial statements are presented fairly, in all material aspects, and in conformity with applicable accounting rules and regulations in the audit report.

Auditors are frequently appointed by shareholders at the company's annual general meeting for the external audit. In a similar way, external auditors are typically hired according to their qualifications, experience, and reputation.

Enhance the overall quality of the company's financial statements so the company's stakeholders, such as shareholders, lenders, suppliers, and others, are more likely to do business with it.

Listed firms and other public interest entities, such as banks and insurance companies, are typically required by stock market regulations and national laws to have their accounts audited by an independent external audit company.