The primary purpose of an audit is to provide an independent examination of financial statements, offering assurance that they are accurate and comply with relevant standards. It helps stakeholders, such as investors and management, trust that the financial information presented is reliable for decision-making.

An internal audit is conducted by a company's internal team to assess risk management, internal controls, and governance processes. In contrast, an external audit is performed by an independent third party to provide an opinion on the accuracy and fairness of financial statements.

Assurance services are professional services provided to improve the quality and reliability of information for decision-makers. They can cover a range of topics, such as risk assessment, process improvements, or financial data accuracy, beyond just auditing financial statements.

Independence is critical because it ensures that the auditor’s judgment is unbiased and impartial. This helps build credibility and trust in the audit findings, as stakeholders rely on auditors to provide an objective assessment of the financial statements.

The audit risk model helps auditors assess the risk that they might issue an incorrect opinion on financial statements. It is composed of three components: inherent risk (likelihood of misstatement before controls), control risk (risk that a misstatement isn’t prevented or detected by controls), and detection risk (risk that an auditor's procedures fail to detect a misstatement).

While detecting fraud is not the primary objective of an audit, auditors assess the risk of material misstatement due to fraud and design audit procedures accordingly. If suspicious activities are detected, auditors investigate further and may report the findings to management or the appropriate authorities as needed.