MEANING – AUDTING

 The Word Audit is derived from the Latin

word "Audire" which means to hear.

 In Olden days, some experienced people

ordinarily judges the accounts of business
people for the purpose of the correctness
of accounts.
DEFINITION
 SIMPLE DEFINITION :- SPICER AND PEGLER

“ Audit is an examination of accounts & records which is carried out by vouching the
evidences, supporting various transactions; by such an examination it is ascertained that the
Balance Sheet gives a true & fair view of the state of affairs of business & the Profit & Loss
Account gives a true & fair view of the profit or loss of business.
OBJECTS OF AUDITING
Primary Secondary Other
objective objective objectives
Varification of a/c Moral Check
Detection &
B/s show true and prevention of Error Complaince of co.’s
fair state Act

P & L a/c show true Detection & To create trust in

& fair state Prevention of Fraud govt.
ADVANTAGES OF AUDITING
Businessman’s point of view:- Investor’s Point of view

 Detection of errors and frauds Protect interest

 Loan from banks
 Proper valuation of Moral check
investments
 Proper valuation of assets Build Reputation
 Government acceptance
 Suggestions for improvement
Good security
 Better Reputation

Uniformity in accounts
AUDIT PROCEDURE
Audit
Programme

Test Audit Note

Checking Book

Routing Working
Checking Paper
AUDIT CONCLUSION
• Auditor's overall opinion in relation to the audit objective is very important.
• (e.g. there is adequate control over...., such and such task is being performed efficiently and
1 effectively, or vise versa)

• Auditor's opinion is a must in many progressive audit shops.

2
• The main thing is keeping the main thing the main thing.
• • If the Auditee deserves to be complemented for its exceptional accomplishment, the
3 auditor should do so. This results in a significant reward.