In this blog we are going to see about an educational content.

AUDITING         

Meaning of auditing :

Auditing is the process of checking the financial statements along with the other accounting information of a business entity.

It is the systematic procedure where the economic condition of the entity is analyzed.

It is the process of checking if the business is running profitably or not.

Auditing is an important process for the company, the investors, the government, creditors,  shareholders, etc.

They very much rely on audit reports to make important business decisions.

The auditing process is done by Auditor i.e. Chartered Accountant.

It is a periodical assessment and is done monthly, quarterly or yearly.

Definition 

         Auditing is an official inspection and verification of the credibility of financial reports. Audit can be conducted by either a business's management as an internal control process or by the government in case the note any suspicious financial activity.

Origin of auditing :

The term auditing is derived from the Latin word ‘Au dire’, which means ‘to hear’ .  In ancient times, auditors used to listen to the officers and the people of authority to confirm the validity of their words. Over the years, the role of auditing evolved to verify written reports, specifically the financial records of individuals and businesses.

Purpose of auditing :

Auditing is done to verify the accuracy of data presented by accountant. It is done with the purpose of revealing to what extend the true and fair view of records is maintained in the transactions.

 Sequence

Auditing starts at the end of accounting.

Scope:

Auditing seeks to form an opinion on financial statement.

Types of auditing:

There are various types of auditing ,

Internal Audit
External Audit
Financial Audit
Operational Audit
Compliance Audit
Tax Audit 
Information System Audit
Environmental And Social Audit

Preliminaries to the Audit:

Audit of an organisation requires a significant degree of planning and protocols in order to ensure that the overall efficacy of the audit process is intact, and is able to meet the required evidence that can help the auditors to obtain reasonable assurance about the accuracy of the financial statements.

Therefore, the Audit should be planned in order to ensure that the auditor is able to execute the audit process in a smooth manner.

Therefore, it can be seen that preliminary audit can be defined as audit fieldwork that is performed by the auditors before the end of the period under examination.