AUDIT MEANING

– Auditing is nothing but the systematic and critical examination and verification of the books of accounts. It can be undertaken throughout the year or periodically. – The primary aim is to find out whether the financial statements exhibit a true and fair view of the business.

ADVANTAGES OF AUDIT

– Audited accounts are considered more reliable. – Errors and frauds are detected in time. – The management will write the accounts timely and take sufficient care to see that it’s accurate. – The guidance of the auditor helps the management. – Tax authorities, readily accept the audited accounts and the process of tax filing becomes less time consuming. – Claim of loss from the insurance company is easily settled if the accounts presented are audited. – There is quick sanctioning or approval of loans if the accounts are audited.

COMPUTERISED AUDIT

Computerised Audit is the use of computerised system to conduct audit in an efficient way. It uses technology to collect and gather data, conduct the audit operations and further reporting of the same. It refers to the use of computers to achieve audit objectives.

TYPES: 

INTERIM AUDIT 

An interim audit is one when the auditor completes an audit up to the date of a set of interim accounts, for example quarterly or half yearly accounts. G. William

STATUTORY AUDIT

– The statutory audit is a type of audit which is mandatory by the Companies law. It is also known as financial audit. – The main motive behind the statutory audit is to make sure that the financial statements presented by the company display a true and fair view of the company’s financial position.

CONTINUOUS AUDIT 

– Audit that remains continue throughout the financial year is known as the continuous audit. – The auditor checks each and every transaction. The large scale business organisations require constant check of their business matters, as there may be declaration of dividend, during the year.

CONCURRENT AUDIT

– The word concurrent itself defines its meaning, it means existing, happening, or done at the same time. Concurrent audit means doing the examination of the financial transactions at the time of happening or parallel with the transaction. Time between compiling and checking accounts is very short.