what is the relevance of external audit report to management?

Question

Relevance of exetrnal audit report

Answer 1

If you're referring to external audit in terms of taxes, I'm not sure. If in terms of general business advice: They may genuinely be looking for objective input, or they may be looking to make some unpopular decisions (cutting jobs), so they pay an outside consultant to come in and say what they want, therefore taking some of the heat off themselves.

Answer 2

A financial audit is designed to determine whether financial statements are fairly presented in accordance with Generally Accepted Accounting Principles (GAAP). In the United States, financial audits are required for all publicly registered companies. In addition, financial audits may be performed for private companies, registered charities, and some governmental and public entities.
There are various reasons management may rely on the audit report. Public companies rely on external auditors to prepare their audit reports to submit to the SEC. Banks may also require an audit report for the company to receive funding (many include certain financial covenants in their loan agreements).