PROCESS OF AUDITING,AUDITING VS INVESTIGATION
Process Of Auditing,Auditing Vs Investigation
INTRODUCTION:
Introduction to auditing:
Economic decisions in every society must be based upon the information available at the time the decision is made. For example, the decision of a bank to make a loan to a business is based upon previous financial relationships with that business, the financial condition of the company as reflected by its financial statements and other factors.As a result the bank has lost both the principal and the interest. In addition, another company that could have used the funds effectively was deprived of the money.
DEFINITION : 1. Spicer and Pegler: "Auditing is such an examination of books of accounts and vouchers of business, as will enable the auditors to satisfy himself that the balance sheet is properly drawn up, so as to give a true and fair view of the state of affairs of the business and that the profit and loss account gives true and fair view of the profit/loss for the financial period, according to the best of information and explanation given to him and as shown by the books; and if not, in what respect he is not satisfied".
ORIGIN AND EVOLUTION : The term audit is derived from the Latin term ‘audire,’ which means to hear. In early days an auditor used to listen to the accounts read over by an accountant in order to check them. Auditing is as old as accounting. It was in use in all ancient countries such as Mesopotamia, Greece, Egypt. Rome, U.K. and India. The Vedas contain reference to accounts and auditing. Arthasashthra by Kautilya detailed rules for accounting and auditing of public finances. The original objective of auditing was to detect and prevent errors and frauds. FEATURES OF AUDITING
1. Audit is undertaken by an independent person or body of persons who are duly qualified for the job.
2. Audit is a verification of the results shown by the profit and loss account and the state of affairs as shown by the balance sheet.
3. Audit is a critical
INTRODUCTION:
Introduction to auditing:
Economic decisions in every society must be based upon the information available at the time the decision is made. For example, the decision of a bank to make a loan to a business is based upon previous financial relationships with that business, the financial condition of the company as reflected by its financial statements and other factors.As a result the bank has lost both the principal and the interest. In addition, another company that could have used the funds effectively was deprived of the money.
DEFINITION : 1. Spicer and Pegler: "Auditing is such an examination of books of accounts and vouchers of business, as will enable the auditors to satisfy himself that the balance sheet is properly drawn up, so as to give a true and fair view of the state of affairs of the business and that the profit and loss account gives true and fair view of the profit/loss for the financial period, according to the best of information and explanation given to him and as shown by the books; and if not, in what respect he is not satisfied".
ORIGIN AND EVOLUTION : The term audit is derived from the Latin term ‘audire,’ which means to hear. In early days an auditor used to listen to the accounts read over by an accountant in order to check them. Auditing is as old as accounting. It was in use in all ancient countries such as Mesopotamia, Greece, Egypt. Rome, U.K. and India. The Vedas contain reference to accounts and auditing. Arthasashthra by Kautilya detailed rules for accounting and auditing of public finances. The original objective of auditing was to detect and prevent errors and frauds. FEATURES OF AUDITING
1. Audit is undertaken by an independent person or body of persons who are duly qualified for the job.
2. Audit is a verification of the results shown by the profit and loss account and the state of affairs as shown by the balance sheet.
3. Audit is a critical