Auditing
AUDITING
CHAPTER-HEADS
Chapter 1 : INTRODUCTION
Chapter 2 : TYPES OF AUDIT
Chapter 3 : INTERNAL CONTROL AND INTERNAL CHECK
Chapter 4 : VOUCHING AND VERIFICATION
Chapter 5 : AUDIT PLANNING AND DOCUMENTATION
Chapter 6 : COMPANY AUDITOR
Chapter 7 : COMPANY AUDIT
Chapter 8 : TYPES OF REPORT
UNIT 1 INTRODUCTION
Q1. Define an ‘Audit’ and state the various objects of an audit.
Or
‘Two main objects of an audit are detection and prevention of errors and frauds.’ Comment. Can auditing prevent them?
Ans1. The word ‘Audit’ is derived from the Latin word ‘audire’ which means ‘to hear’. In olden times whenever the owners of a business suspected fraud, they appointed certain persons to check the accounts, who used to hear these accounts and express their opinion about their correctness or otherwise. Such persons were known as ‘auditors’. Thus, the term ‘auditor’ means literally ‘hearer’, i.e., one who hears and is used ever since the days when public accounts were accepted and approval on the basis of hearing the accounts read.
The original object of an audit was to see whether the accounting party has properly accounted for the receipts and payments of cash. If cash has been embezzled who did it and what was the amount. It was mainly an audit of cash book. The main object of modern audit is to fine out whether the balance sheet shows true and fair view of the state of affairs of a company and is drawn-up according to the Companies Act.
Spicer and Pegler have defined, ‘An audit may be said to be such an examination of the books, accounts and vouchers of a business as will 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 affairs of the business and whether the profit and loss account gives a true and fair view of the profit or loss for the financial period. According to the best
CHAPTER-HEADS
Chapter 1 : INTRODUCTION
Chapter 2 : TYPES OF AUDIT
Chapter 3 : INTERNAL CONTROL AND INTERNAL CHECK
Chapter 4 : VOUCHING AND VERIFICATION
Chapter 5 : AUDIT PLANNING AND DOCUMENTATION
Chapter 6 : COMPANY AUDITOR
Chapter 7 : COMPANY AUDIT
Chapter 8 : TYPES OF REPORT
UNIT 1 INTRODUCTION
Q1. Define an ‘Audit’ and state the various objects of an audit.
Or
‘Two main objects of an audit are detection and prevention of errors and frauds.’ Comment. Can auditing prevent them?
Ans1. The word ‘Audit’ is derived from the Latin word ‘audire’ which means ‘to hear’. In olden times whenever the owners of a business suspected fraud, they appointed certain persons to check the accounts, who used to hear these accounts and express their opinion about their correctness or otherwise. Such persons were known as ‘auditors’. Thus, the term ‘auditor’ means literally ‘hearer’, i.e., one who hears and is used ever since the days when public accounts were accepted and approval on the basis of hearing the accounts read.
The original object of an audit was to see whether the accounting party has properly accounted for the receipts and payments of cash. If cash has been embezzled who did it and what was the amount. It was mainly an audit of cash book. The main object of modern audit is to fine out whether the balance sheet shows true and fair view of the state of affairs of a company and is drawn-up according to the Companies Act.
Spicer and Pegler have defined, ‘An audit may be said to be such an examination of the books, accounts and vouchers of a business as will 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 affairs of the business and whether the profit and loss account gives a true and fair view of the profit or loss for the financial period. According to the best