Sem título

Página 1

Auditing & Assurance

Nature of Auditing

Definition of Auditing

According To ICAI-

Audit is systematic & independent examination.

Of data, Statements, records, operations and performances

of an enterprise for stated purpose

As Per the AAS-

Auditing is Independent examination

of financial information.

of any entity whether profit making or not,

ireespective of its size & legal structure

when such an examination is conducted with a view to express an opinion.

Objectives of Audit

The objective of Audit, naturally, should be to see that what the statements of account convey is true and not misleading and that such errors and fraud do not exist as to distort what accounts really should convey.

The primary aim of audit is the establishment of degree of reliability of annual statements of accounts.

If there remains deep laid fraud in accounts, which is normal course of examination of accounts may not come to light, it will not be costrued as failure of audit, provided the auditor was not negligent in carrying out his work.

(principle established in 1988 Re-Kingston cotton mills co.)

The Nature of audit objectives was also Highlighted. (Re The London and General Bank Ltd. [1895]

Facts of that case,

Auditor must ascertain that the books of account show the true financial position of the company.

New Page