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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