To overcome the problem of unreliable information, an assurance mechanism is required to be developed, which provides independent assurance to the decision makers about the quality and accuracy of information being provided to them. Such mechanism is provided through the audit mechanism, both internal and external. 11. Informative, accurate, reliable and analytical audit reports are sine qua non for both financial stability and growth.
The primary role of auditors is to resolve the Agency problems. Agency problems arise due to information asymmetries between the Agent (Management or the Government Departments/Users of Public Funds) and the Principal (Shareholders, Investors and the Public).