This report discusses the importance of auditing the internal and external business environment for companies. It explains the concept of business environment and its influence on company operations. It also explores the need for auditing the microeconomic environment and the use of concepts and models. The report further analyzes the internal and external factors affecting a mobile phone company, using SWOT and PESTLE analysis. It highlights the significance of understanding political, economic, social, technological, legal, and environmental factors for successful business operations.