Auditing-definition & objective of auditing
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Transcript of Auditing-definition & objective of auditing
POWERPOINT PRESENTATION OF AUDITING
GROUP MEMBERS
ABHSHEK-66AKANCHHA-68RAJ RAYMOND-92SHYMAL MAJUMDAR-102RAVI KUMAR-108
TOPICGive presentation on definition and objectives of auditing , class of audit, internal check and internal audit.
CONTENTS Introduction of auditing Objective of auditing Class of audit Internal check Internal audit Internal audit vs internal check
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.
OBJECTIVE OF AUDITING Primary objective of auditing Secondary objective of auditing• Detection and prevention of errors• Detection and prevention of fraud• System improvement
CLASS OF AUDIT
Statutory audit Periodical/annual audit Balance sheet audit Partial audit Cost audit
INTERNAL CHECKA 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.
CHARTERISTICS OF INTERNAL CHECK
proper distribution of work Priority to accounting machines Change in work of employees Proper control over purchase and sales
ADVANTAGES OF INTERNAL CHECK
FOR THE BUSINESS• Prevention of errors and frauds• Increases the profit of te business• Proper performance of work
FOR THE AUDITOR• Quick preparation of final accounts• Reduces the work load of auditor
FOR THE OWNER• Accuracy of the accounts can be relied
upon• Increase in profits
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
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.
OBJECTIVE OF INTERNAL AUDIT Verify correctness Liabilities have been incurred Comment on the effectiveness Examine the protection Identify the authorities
DISADVANTAGES OF INTERNAL AUDIT
Not full proofDone by the professionalsNot accepted by shareholders
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
INTERNAL CHECK Vs INTERNAL AUDIT
Similarities Dissimilarities• Meaning• Object• Need for separate staff• Nature of work
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