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Pooja, Lovely Professional University                                     Unit 1: Introduction to Auditing




                             Unit 1: Introduction to Auditing                                     Notes



              CONTENTS
              Objectives
              Introduction
              1.1  Origin of Audit
              1.2  Defining Audit

              1.3  Difference between Auditing and Accounting
              1.4  Objects of an Audit
              1.5  Advantages of Auditing
              1.6  Different Types of Audit
              1.7  Difference between Internal Audit and Statutory Audit
              1.8  Objectives of Audit
                   1.8.1  Primary Objectives
                   1.8.2  Secondary Objectives
              1.9  Summary

              1.10 Keywords
              1.11 Review Questions
              1.12 Further Readings

            Objectives

            After studying this unit, you will be able to:
                Describe the origin of audit;
                Define audit;
                Differentiate between accountancy and auditing;
                Know the objectives of auditing;
                Know different classes of audit;
                Locate errors.

            Introduction


            It is clear from the above definitions that auditing is the systematic and scientific examination of
            the books of a accounts and records of a business so as to enable the auditor to satisfy himself
            that the Balance Sheet and the Profit and Loss Account are properly drawn up so as to exhibit a
            true and fair view of the financial state of affairs of the business and profit or loss for the
            financial period. Unit explains the origin of audit and standards as defined by Company’s Act
            and by the Institute of Chartered Accountants of India. Unit tries to define audit, and explain
            various aspects of auditing and duties and responsibilities of an auditor. Two objectives of
            auditing are primary and secondary. The main object of auditing is to help the auditor to form
            an opinion as to whether the books of account and the financial statements show true and fair
            view of the business and the subsidiary object of auditing is to detect and prevent errors and




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