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Auditing Online writing assignment help is defined as a critical analysis of an organization’s financial records handled by a third party. Auditing can be referred to as examining the transactions and financial statements of a company that are prepared by somebody else. Auditing can also be described as the process of audit. The audit is the analysis of accounting records by an auditor where he physically inspects the inventory to ensure that the documented system of recording transactions is effectively by all departments of the organization.
In order to understand the process of auditing we first need to understand the concept of an audit Online writing assignment help Some popular definitions of the audit are given as under
- According to Lawrence R. Dicksee, ‘‘ An audit is an examination of accounting records undertaken with a view to establishing whether they completely and correctly reflect the transactions to which they purport to relate.’’
- According to Spicer and Pegler, ‘‘ Audit such an examination of the books of accounts and vouchers of a business, as will enable the auditor to satisfy himself that the Balance Sheet is properly drawn up, so as to give a true and fair view of the state 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 of his information and explanations given to him and as shown by the books, and if not, in what respect he is not satisfied.’’
- According to Taylor and Perry, ‘‘Audit is defined as the investigation of some statements of figures involving examination of certain evidence, so as to enable an auditor to make a report on the statement. -
Online writing assignment help There are ten techniques of auditing given by Professor Mautz.
i) EXAMINING PHYSICALLY AND COUNT
ii) CONFIRMATION
iii) EXAMINING THE AUTHORITATIVE DOCUMENTS AND COMPARING WITH RECORDS
iv) RE-COMPUTING
v) RETRACE THE BOOK-KEEPING PROCEDURES
vi) SCANNING
vii) INQUIRING
viii) EXAMINING THE SUBSIDIARY RECORDS
ix) CO-RELATING WITH RELATED INFORMATION
x) OBSERVING THE PERTINENT CONDITIONS AND ACTIVITIES
i) It is a scientific examination and analysis of the financial status and transactions of a company.
ii) It is a verification of the profits and losses that can be verified through a Balance Sheet.
iii) Auditing is carried out by a qualified person or an auditing body.
iv) The process of auditing is a critical evaluation of a company’s accounting.
v) Auditing is carried out through documents, information, and other explanations provided by the company.
vi) The process of auditing requires the auditor to inspect, check, verify, etc. the financial statements and documents provided by the company in order to verify them to the book of accounts.
i) Maintaining an analysis of internal accounting controls of an organization by reviewing, testing, and evaluating them. These include inventories, payroll, stock, etc.
ii) Different assets such as cash, furniture, equipment, etc. to be inspected, counted, and calculated and determining the cost of inventory at the market price in accordance with the basic accounting principles.
iii) A list depicting the final inventory can be obtained and checked in order to gain proof of accuracy.
iv) Inquiring about any unwanted or slow-moving inventories.
v) Pre-numbered accounting tags to be accounted for both after and before physical stock-taking
i) Confirmation of accounts and financial statements of an organization can be received by verifying them.
ii) Because of the pressure of audit, accounts are maintained on a regular basis especially when continuous audit process operation.
iii) Auditing helps in detecting any omissions or frauds in the accounting of an organization. If there are any weaknesses in the accounting methods, auditing helps in taking precautionary and preventive measures.
iv) An organization can rely on audited accounts and financial statements for different purposes such as tax assessment, borrowings, adjusting accounts, buying or selling of a business, etc.
v) Auditing helps in keeping a check on employees in case they commit any fraud.
vi) Through inspection, the wastage of cost and inventories can be determined through auditing.
In order for a company to have a complete record of its financial status and financial transactions, auditing is necessary. Auditing is mandatory for companies to work effectively and keep a balance in their financial position along with a check on their employees. In order to carry the process of auditing effectively, the companies requirement for efficient auditors is increasing.s
LEGAL DECISIONS
Many courts demand the financial statements of the companies to keep a check on their transactions with other legal parties. This has led to an increase in the duty and demands of an auditor for auditing.
EDP ACCOUNTS
Many bug firms rely on EDP (Electronic Data Processing) to maintain their financial records leading to easy auditing for auditors. Now auditors are more often required to manage to computerized financial data of the companies.
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