5. An examination of records or financial accounts to check their
accuracy.
Auditing is a systematic examination of the books and 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.
6. Basis of Organizational Structure
Based on Timing & Scope of Audit Procedures
Basis of Specific Objectives behind Audit
7.
8. Where undertakings are formed under the statute or laws, audit
for such undertakings I made compulsory under the statute that
govern them.
An audit undertaken under any statute or law is called statutory
audit.
A qualified external auditor can conduct a statutory audit.
9. Private Audit is one that is not mandatory under any statute or
law. It is undertaken by the enterprises in view of the several
benefits resulting from it.
Audit of Sole Proprietorship
Audit of accounts of other entities
Audit of Partnership Firm
10. The government offices, departments, under-takings registered
as companies, are also subject to independent financial audit.
Usually a statutory auditor, appointed by the General
Government on the advice of the Comptroller and Auditor
General, audits accounts of government companies
11.
12. A continuous audit is one where the auditor is required to examine the
books of account of a business concern at regular intervals say
weekly, fortnightly, and quarterly or as per the requirement of the
management and quantum of work.
Continuous audit is followed in big organizations, where business is
extraordinarily large.
It is also known as “Running Audit”.
13. Internal audit as the term implies is an audit conducted within the
organization by an internal auditor appointed by the management
of an enterprise.
To ensure that all the assets of the organization are safe-guarded
against any probable misuse.
To highlight the weak areas of the organization and give
suggestions to strengthen them.
14. Interim Audit is one that relates to an interim period and not to the
full accounting year. It is conducted between two regular audits.
It lies between final audit and continuous audit.
It may be monthly quarterly or half yearly. When any partner or
owner or director or a businessman wants to know the reliable
results during the financial year then such type of audit may be
applied.
15. A final audit is one where the auditor undertakes the audit work
only at the end of the financial year.
The auditor visits his client only once a year and completes the
entire work in one session.
16. It is a procedure in which the figures, as stated in the balance sheet
are taken as a base and their authenticity is verified from the
records.
It involves the checking of values and provisions, surplus, etc.
An auditor should also verify the profit or loss from the profit and
loss account since profit or loss is one of the balance sheet items.
17.
18. Cost Audit as the expression implies, is an audit of cost
accounting record. It has been defined in various ways.
“The term „Cost Audit‟ means the detailed checking of the
costing system, techniques and accounts to verify their
correctness and to ensure adherence to the objectives of cost
accountancy”.
19. Central Government may at any time, by order direct that a
special audit of a company‟s accounts for such period or periods
as may be specified in the order shall be conducted and may by
the same or a different order appoint either a chartered
accountant or the company‟s statutory auditor to conduct such
special audit.
20. This is done to ensure that each individual or company pays
his/her/its full tax liability.
Audits are conducted on a random basis, or when something
appears remiss on a tax return.
21. Management Audit refers to critical and analytical
examination of the performance of different managerial
functions in an organization.
It involves a critical review of all aspects of the process of
management.
22. Operational Audit aims at improving the overall performance of
a business undertaking by improving future business operations
carried out by the management.
To conduct such audit normally an independent internal auditor
is appointed.
23. A Marketing Audit is a comprehensive, systematic, independent
and periodic examination of a company‟s or business unit‟s
marketing environment, objectives, strategies and activities with
a view to determining problem areas and opportunities and
recommending a plan of action to improve the company‟s
marketing performance.
24. Environmental Audit, is a process to examine the effects -good
or bad- of the operations of an enterprise on the environment.
Environmental Audit is an assessment of the nature and extent
of harm (or risk of harm) to the environment posed by an
industrial process or activity, waste, substance or noise.
25. Social Auditing is a process that enables an organization to
assess and demonstrate its social, economic and environmental
benefits and limitations.
Audit attempts to assess the social performance of an enterprise.
26. A Human Resource Audit reviews an organization‟s policies,
procedures, and practices concerning human resources.
Its purpose is to examine the technical and practical dimensions
of the human resource function and to create a comprehensive
system that adds value to the organization.
27. The General Audit alternatively called mini audit, site energy
audit or complete site.
This type of audit will be able to identify all energy
conversation measures appropriate for the facility given under
its operating parameters.
