Auditing concepts

1. By
Gayathiry D

2. Auditing Origin – Definition – Objectives
–Scope - Types – Advantages and
Limitations – Qualities of an Auditor –
Audit Programmes- Basic Principles
governing an audit- Ethical principle -
concept of Auditor’s Independence-
Relationship of auditing with other
disciplines.

3. Origin And Definition
The word audit is derived from the Latin word “AUDIRE” which means to
hear. Initially auditor was a person appointed by the owners to check account
whenever the suspected fraud, he was to hear explanation given by the person
responsible for financial transactions.
Emergence of joint stock companies changed the approach of auditing as
ownership was pestered from management. The emphasis now is clearly on the
verification of accounting date with a view on the reliability of accounting
statement.
Auditing refers to a systematic examination of books, accounts, documents and
vouchers of an organization to ascertain how far the financial statements present a
true and fair view of the concern.
ISA (International Standard of Auditing)
“ An Audit is the independent examination of financial statement or related
information of an entity, whether profit oriented or not, and irrespective of its size,
or legal form, when such an examination is conducted with a view to expressing an
opinion thereon”

5. OBJECTS OF AUDIT
Expression of export Opinion Detection and prevention of
Errors Frauds
Clerical Principle Compensating Duplication Embezzlement Misappropriation Fraudulent
Error of omission Error of Commission
Partial error complete error
Main objectives Secondary objectives Specific objectives

6. To form an
opinion, ensure
that the
accounting
information is
reliable and
sufficient i.e. basis
for the
preparation of the
financial
statements
Scope
Ensure whether the
relevant information
is properly
disclosed in the
financial statements
All aspects
relating to
Accounting and
Finance of the
enterprise to be
covered
Constraints on the scope
of the audit that impair
the auditor’s ability to
express an unqualified
opinion should be set out
in his report

12. Relationship of auditing with other
disciplines.