Corporations make enormous amounts of money, and it is possible for the management and other employees to embezzle funds. In order to prevent this, the shareholders appoint an external auditor who audits the books of accounts to ensure that they are prepared in accordance with the laws governing financial statements. Further, the auditor ensures that the assets of the corporation are protected (O’Connor, 2004).
In order to ensure growth and smooth running of the corporation, the shareholders have the right to appoint and remove the auditor from office. This ensures that the auditor will always act to the best interest of the shareholders. In return, this ensures growth of the corporation since all the resources in the corporation are used for the intended purpose. The auditors have to report any misconduct seen in the corporation. Further, the auditors advises the management team of the financial regulations and accounting principles to ensure that they keep the books of accounts as per the requirements.