Auditing practices used by Micro Enterprises

According to Ali (2019), auditing involves reviewing and inspecting business's accounts in order to
determine if they comply with the laws, guidelines, and rules and whether the accounts are arranged
well.

Ejembi (2004), itemized some of the doings of audit practices as follows: check wages and salaries
vouchers to determine accuracy and correctness; examine the purchases daybook, sales day book,
returns inward and returns outward day books to confirm correct recording and posting to the ledger
accounts; inspect ledger accounts to ensure correct balancing; audit trading account to confirm
correctness in form and content and examine income statement to determine that net profit for the
year under review is correct.

Auditing practices in relation to SMEs, according to Ejembi involves the income statement, balance
sheet, and assessment of the sources of funds, with an intention to ascertaining if the transactions
address a fair and true view of the situation of affairs within a specified time period, usually on monthly
basis or at year end of the business organization.