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 Kinds
or Au
or
Classification

Since the audit

workis

efficientv
stretch
Auditata
stretch:

is
carried
out
queries
2) any
gaps.
Audit

work is done continuously and not

continuo

without The
i m m e d i a t e l y .

and mme are simple

p r o g r a m m e

solved planning
are audit
the books are checked
The

in
i n s t a l m e n t .

frauds:
Since ata
and ures in the audited
tigures
Less
e r r o r s

change any
3) employees
can
no
stretch,
account staffis .

book work: The

accounts
disrupt
accounting year.
There
Does not
4) the
time during work every now ani
and
disturbed any attend to a u d i t
accountants
to
need for the

then.

Disadvantages disadvantages:
the following
Final audit has is done
the routine audit

Delay in final accounts : Since

1 accounts may be delayed and ready
after the year end, the final
after the year end.
long
holders: The share holders wO
2) Delay of dividend to share after the end o
be unhappy as they receive dividends long
financial year. It would be difficult for the company
to prop
1nterim accounts and pay interim dividends to the share hour
during the financial year.
o u n t s

3 Stale Accounts for Banks / Investors: the final a

stale
g year. Such
are available long after the end of accounting.
taking
accounts are not useful to banks and investors 1o
decisions regarding loans and investments.
t oniy

4) No moral check on employees: Since the audito nce

atthe end of the c h a n c

year, dishonest have a

commit frauds
employees J u s t

duringthe year and clean up the ace

before the auditors
arrive, eg. teeming
5) No familiarity with
and lading Since the auditor

spends little ume at the client's client's business:

Since
1ot
heco
familiar with all the place, he can aflec
aspects of clients ess. This
ay
the quality of audit. business.
 PRINCIPLES AND PRACTICE OF AUDITING 2.17

9) Rectification entry: Any alteration should be done by means

of a rectilication entuy in the journal.
10) Secret tick: The auditor should put a secret tick against
any bgure alreacdy altered.
32 Final or completed audit / periodic audit/ Annual audit :

Meaning: Final, completed, periodic or annual audit means an

audit taken up after the end of the accounting year. The audit
work begins only after the accounting year is over.

Generally majority audits are in the nature of final,

periodic, completed or annual audits. Under this type of audit
the auditor takes up his work of checking the books of accounts
and other related documents only at the end of the accounting
period when the transactions for the whole financial year are
completely recorded, balanced, the trial balance is then drawn
and the final have been
out accounts prepared. Theauditor will
normally start routine checking of books and other audit
procedures only after the close of the financial year. Final audit
is carried out continuously until it is completed. It is a post
account audit.

This type of audit is appropriate for smaller business

concern because it is less expensive. It is also suitable where
the chances of frauds are less. This type of audit is generally
preferred by the auditors because the chances of alteration of
figures are less. Besides the final and continous audit, there
may be two more types of audit viz. Interim audit and balance

sheet audit. )
3.2.1 Advantages of final audit
Final audit has the following advantages :

) Inexpensive : Under this type of audit, the auditor spends

normal time on the audit work, the audit fees are also normal.
Final audit is thus inexpensive. Even a small organisation (a
sole trader or a firm) can opt for a final audit to obtain the

aavantages of an independent financial audit.