Annual auditing of a school district accounts by a professional agency
Annual auditing of a school district accounts by a professional auditing firm constitutes an external audit. An external audit is an independent review of an organization accounts by an independent auditing firm. The auditor is then required to express an opinion on whether the financial accounts a true and fair representation of the state of affairs of the organization in accordance with the relevant financial reporting framework. The value of an external audit on school district accounts far outweighs the costs.
The first advantage of an external audit is that it will facilitate comparison of annual school district accounts. External auditors normally examine accounts of an organization against a given financial framework that is applied by similar organizations in preparing their annual reports. The auditor then reports on whether the relevant accounting framework has been complied. Therefore, external auditing will ensure that there is an equality of measures between annual school district accounts which will facilitate comparison between various school districts performance. It will also facilitate evaluation of annual accounts over the years.
The second advantage of an external audit is that it will improve the credibility of annual district accounts. External auditing helps to detect and/or prevent fraud and error in accounts. During auditing fraud and error committed in the preparation of the annual reports are likely to be corrected. External auditors also assess whether adequate controls were placed to prevent and detect fraud. The fact that annual accounts will be audited may deter people in charge of the annual accounts and funds from committing fraud. Therefore, external auditing will improve the quality and credibility that is placed on the school district accounts by all stakeholders.
In this light, annual auditing of a school district accounts by a professional auditing firm should be made mandatory. It will facilitate comparison and improve credibility of annual school district accounts.
