Auditing

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accepted accounting principles, management policies and stated requirement." -R.E.Schlosser

Objectives of Auditing

The objectives of auditing are changing with the advancement of business techniques. Earlier it was only to check the correctness of receipts and payments. The objectives of the auditing have been classified under two heads:

Main objective

Subsidiary objectives

Main Objective: The main objective of the auditing is to find reliability of financial position and profit and loss statements. The objective is to ensure that the accounts reveal a true and fair view of the business and its transactions. The objective is to verify and establish that at a given date balance sheet presents true and fair view of financial position of the business and the profit and loss account gives the true and fair view of profit or loss for the accounting period. It is to be established that accounting statements satisfy certain degree of reliability. Thus the ...

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It has become a necessity for every commercial and even non- commercial organization. The importance of auditing can be summed in following points:

Audited accounts help a sole trader in knowing the value of the business for the purpose of sale.

Dispute over correctness of profits can be avoided.

Shareholders, who do not know about day-to-day administration of the company , can judge the performance of management from audited accounts.

It helps management in detecting and preventing errors and frauds.

Management gets advice on financial affairs from the auditors.

Long and short term creditors depend on audited financial ...

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