Meaning Types Importance Internal External IRS tax Financial Operational Compliance Information system Payroll Pay MCQ

1. AUDITING
Presented by
Sinchana S.D
I M.Com
Guided by,
Sundar B.N,
Asst. Prof of course co-ordinate,
Post graduation studies in
commerce,
G.F.G.C.W Holenarsipura.

2. Contents
 Auditing meaning
 Different types of audit
 Importance of Auditing

3. Auditing meaning
 The term “audit” comes from the Latin word
“audire,” which means “to hear.”
 The purpose of auditing is to confirm the
financial status as stated in the financial
statements.
 It reviews financial statements to see if they
present an accurate and fair picture of its
financial position and profit or loss.

5. Internal audit
Internal audit refers to an independent service
to evaluate an organisation’s internal controls,
its corporate practices, processes, and
methods.
An internal audit helps in securing
compliance with the various laws applicable
to an organisation.

6. External Audit
 An external audit is an examination that is
conducted by an independent accountant.
 This type of audit is most commonly
intended to result in a certification of the
financial statements of an entity.
 This certification is required by certain
investors and lenders, and for all publicly-
held businesses.

7. IRS tax
In the United States of America, an
income tax audit is the examination
of a business or individual tax return
by the Internal Revenue Service
(IRS) or state tax authority.

8. Financial Audit
 A financial audit is an objective
examination and evaluation of the
financial statements of an
organization to make sure that the
financial records are a fair and
accurate representation of the
transactions they claim to
represent.

9. Operational Audit
 An operational audit is an
examination of the manner in
which an organization conducts
business,
 with the objective of pointing out
improvements that will increase its
efficiency and effectiveness.

10. Compliance Audit
 A compliance audit is an
independent evaluation to
ensure that an organization is
following external laws,
rules, and regulations or
internal guidelines, such as
corporate bylaws, controls,
and policies and procedures

11. Information System
 An information technology
audit, or information systems
audit, is an examination of the
management controls within an
Information technology (IT)
infrastructure and business
applications.

12. Payroll
 A payroll audit, also known as a
compliance audit, is an analysis of an
organisation’s payroll-related processes.
 It identifies compliance problems
concerning employment laws, verifies tax
withholdings, spots human errors, and
prevents payroll fraud, to name a few.
 Thus, it is vital to frequently do a payroll
audit.

13. Importance of Auditing
 The audit helps in the detection and
prevention of errors and frauds.
 The audit helps in maintaining the
records and verification of books of
the books of accounts.
 The independent opinion of the
auditor is extracted through auditing
which is extremely essential for the
management of the company.

14. Auditing MCQ Questions
1. _______ is the systematic study of books and records or a
business.
A. Auditing
B. Vouching
C. Verification
D. Checking
2. When the auditor is an employee of the organisation being audited the
audit is clasified as_______
A. Internal
B. External
C. Compliance
D. Both A and B

15. 3. Auditing is derived from The Latin word_____
A. Audire
B. Auditor
C. order
D. none of these
4. How much differents types of Auditing _____
A.9 B.8
C. 7 D.6

16. IRS full form ________
A.Internal revenue service
B. Investment revenue service
C.Interium revenu service
D. Including revenue service