Auditing involves independently examining a company's accounting and financial records to determine if its operations comply with laws and accounting principles. It aims to certify that a company's financial statements accurately represent its financial position. An audit is conducted by a qualified independent auditor, not employed by the company. The document outlines key differences between auditing and accountancy, types of audits, objectives of auditing, and features of the auditing process.

1. AUDITING
PRESENTED BY
SHARFA KHAN
M R ATHUL

2. INTRODUCTION
 Auditing is a part of the accounting world. It is an examination
of accounting and financial records that is undertaken independently.
This is done to determine if the company or the business undertaking has
conformed its operations to the laws and the generally
accepted accounting principles.

3. DIFFERENCE B/W AUDITING AND
ACCOUNTANCY
AUDITING
 It is the process of examining books
of accounts and reporting on the
financial statements.
 Its main objective is to examine the
correctness of the accounts and
financial statements and certify that
whether the company exhibits a true
and fair view of state of affairs of the
concern.
 An auditor is an independent person
and is not an employee of the
organisation.
ACCOUNTANCY
 it is the process of recording,
classifying, summarising and
interpreting all the financial
transactions.
 Its main objective is to find out
profit earned or loss suffered by a
company and to show the financial
position of the company for a
particular period.
 An accountant is a permanent
employee of the organisation.

4. CONTINUATION
AUDITING
 An auditor should be a qualified
chartered accountant certified by the
Institute of Chartered Accountants of
India.
 Auditor should submit the report
certifying the truth and fairness of
the financial statements.
 An auditor is remunerated in the
form of professional fees.
 Auditing starts where Accountancy
ends.
ACCOUNTANCY
 An accountant does not require
any formal qualification.
 Accountant is not required to
submit the report on the financial
statements prepared by him.
 An accountant is remunerated in
the form of salary.
 Accountancy starts where Book-
keeping ends.

5. TYPES OF AUDIT:-
1. Internal audit- Internal audits evaluate a company’s internal controls,
including its corporate governance and accounting processes. These
audits ensure compliance with laws and regulations and help to
maintain accurate and timely financial reporting and data collection.
Internal audits also provide management with the tools necessary to
attain operational efficiency by identifying problems and correcting
lapses before they are discovered in an external audit.
2. 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.

6. Continuation
1. IRS tax audit- An IRS audit is a review/examination of an organization's or
individual's accounts and financial information to ensure information is reported
correctly according to the tax laws and to verify the reported amount of tax is
correct.
2. 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.
3. 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

7. Continuation
1. Compliance audit- A compliance audit is a comprehensive review of an
organization's adherence to regulatory guidelines. Audit reports evaluate the strength
and thoroughness of compliance preparations, security policies, user access controls
and risk management procedures over the course of a compliance audit.
2. Information system audit- The effectiveness of an information system’s controls is
evaluated through an information systems audit. An audit aims to establish whether
information systems are safeguarding corporate assets, maintaining the integrity of
stored and communicated data, supporting corporate objectives effectively, and
operating efficiently.
3. Payroll audit and pay audit- A payroll audit is an analysis of a company’s payroll
processes to ensure accuracy. Payroll audits examine things like the business’s active
employees, pay rates, wages, and tax withholdings. You should conduct a payroll
audit at least once per year to verify your process is up-to-date and legally compliant.

8. OBJECTIVES OF AUDITING:
Primary Objectives of audit:-
 Examining the system of internal check.
 Checking arithmetical accuracy of books of accounts,
verifying posting, casting, balancing, etc.
 Verifying the authenticity and validity of transactions.
 Checking the proper distinction between capital and revenue
nature of transactions.
 Confirming the existence and value of assets and liabilities.

9. Cont…
Subsidiary Objectives of audit:-
 Detection and prevention of errors.
 Detection and prevention of frauds.
 Under or over evaluation of stock.

10. FEATURES OF AUDIT:-
• Systematic process.
• Three-party relationship.
• Subject matter.
• Evidence.
• Established criteria.
• Opinion.

11. CONCLUSION
 In conclusion, auditing is explained as part of the managing a
business organization, it isthe independent examination of
the company financial reports, this is to assure that the
financialinformation of the business organization shows true
and fair view of the company. The auditopinion is a relevant
element of audit report as presented by the external auditor.
Some aspectsaffect the independence of an external auditor,
these aspects comprise multiple referrals, size ofthe firm and
advising threat.