Auditing-definition & objective of auditing
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Auditing-definition & objective of auditing
- 3. TOPIC Give presentation on definition and objectives of auditing , class of audit, internal check and internal audit.
- 4. CONTENTS Introduction of auditing Objective of auditing Class of audit Internal check Internal audit Internal audit vs internal check
- 5. INTRODUCTION OF AUDITING Auditing start at the end of work of accountancy auditing is critical analysis of accountancy and gives actual proof accountancy is correct or not.
- 6. OBJECTIVE OF AUDITING Primary objective of auditing Secondary objective of auditing • Detection and prevention of errors • Detection and prevention of fraud • System improvement
- 7. CLASS OF AUDIT Statutory audit Periodical/annual audit Balance sheet audit Partial audit Cost audit
- 8. INTERNAL CHECK A division of duties that does not permit one individual to carry out stages of a transaction .an internal check is intended to prevent fraud and minimize errors.
- 9. CHARTERISTICS OF INTERNAL CHECK proper distribution of work Priority to accounting machines Change in work of employees Proper control over purchase and sales
- 10. ADVANTAGES OF INTERNAL CHECK FOR THE BUSINESS • Prevention of errors and frauds • Increases the profit of te business • Proper performance of work
- 11. FOR THE AUDITOR • Quick preparation of final accounts • Reduces the work load of auditor
- 12. FOR THE OWNER • Accuracy of the accounts can be relied upon • Increase in profits
- 13. DISADVANTAGES OF INTERNAL CHECK Costly for small business Quality is sacrificed for promptness Carelessness among high officials Disorder in the working of a business Risk for an auditor
- 14. INTERNAL AUDIT Internal auditing consists of continuous critical review of financial and operating activities by a staff of auditors functioning as full-time salaried employees.
- 15. OBJECTIVE OF INTERNAL AUDIT Verify correctness Liabilities have been incurred Comment on the effectiveness Examine the protection Identify the authorities
- 16. DISADVANTAGES OF INTERNAL AUDIT Not full proof Done by the professionals Not accepted by shareholders
- 17. ADVANTAGES OF INTERNAL AUDIT Staffs remain alert Help to detect Detect the misuse of resources Check the efficiency of staffs Check the books of accounts
- 18. INTERNAL CHECK Vs INTERNAL AUDIT Similarities Dissimilarities • Meaning • Object • Need for separate staff • Nature of work