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Auditing is a process of examining the financial data, statements, records, operations of the any enterprise. This is process is a very systematically and organized independently. Auditing is an unbiased process with help of which any organization’s financial statements are examined and evaluated. Auditing can be done either by the employees of the organizations themselves internally or it can be done by an outsider firm externally. Auditing is the official verification of the financial accounts and the records.
According to the famous author Montgomery,
“Auditing is a systematic examination of the books and the records of a business or the organization in order to ascertain or verify and to report upon the facts regarding the financial operation and the result thereof.”
In the words of Spicer and Pegler,
“An audit may be said to be such an examination of the books, accounts and vouchers of a business as well enable the auditor to satisfy that the Balance Sheet is properly drawn up, so as to give a true and fair view of the state of the affair of the business whether the Profit or Loss for the financial period accounting to the best of his information and the explanations given to him and as shown by the books and if not in what respect he is not satisfied.”
Lawrence R. Dicksee has described auditing as,
“An audit is an examination of the accounting records undertaken with a view to establish whether they correctly and completely reflect the transactions to which they relate. In some instances, it may b necessary to ascertain whether the transactions themselves are support by authority.”
The word audit is said to be originated from the Latin word “audire” which means “to hear.” In ancient times, the business owner used to appoint a person to check the suspected fraud in the business. That person had to check and verify the accounts. The person who used to be responsible for keeping the accounts and funds used to explain him. The appointed person used to explanation accounts given to that person. It was done to find out if the payments or the receipts were accounted properly or not. At present time, accounting is done not only for the purpose of cash verification. But it has many other important roles. Such as to report the financial position of the undertaking as disclosed by it Profit & Loss Account and its Balance Sheet.
Types of Audits and Reviews
- Financial Audits or Reviews
- Operational Audits
- Department Reviews
- Information System Audits
- Integrated Audits
- Investigative Audits or Reviews
- Follow Up Audits
In terms of finance, the audit of the financial statement is conducted so that it can provide an opinion if the financial statements or the information which is being verified and examined are stated in the accordance with the specified criteria (International Accounting Standards) or not. Without any prior existence of the accounts, it’s impossible to conduct an audit. An auditor starts working when the accountant finishes work.
Auditing Assignment Help covers the following topics:
- Introduction to Auditing
- Nature & Purposes of Auditing
- Audit Processes & Methods
- Audit Evidence & Audit Reports
- Risk Evaluation
- Auditing Accounting Systems
- Auditing Issues
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