The external audit process generally involves several key steps:
1. Planning: The auditor assesses the scope of the audit, understands the business environment, and identifies potential risk areas. 2. Fieldwork: This phase includes testing internal controls, verifying financial transactions, and gathering audit evidence. 3. Evaluation: The auditor analyzes the evidence collected to form an opinion on the financial statements. 4. Reporting: A formal audit report is issued, which includes the auditor’s opinion on the accuracy and fairness of the financial statements.