What is auditing?
Hello friends, **Auditing means** Auditing is systematic and independent examination of data, state,nt, record, operation and performance (financial or otherwisw)of enterprise for stated purpose. In any auditing situation, the auditor perceives and recognized the proposition before him for examination, collects evidence, evaluates the same and on the basis formulates his judgement which is communicated through his audit report.
**Auditing** An examination of records or financial accounts to check their accuracy. 2. An adjustment or correction of accounts. 3. An examined and verified account. 4. A thorough examination or evaluation: Thanks
Hie Veena, **What is an audit** - An audit is the examination of the financial report of an organisation - as presented in the annual report - by someone independent of that organisation. The financial report includes a balance sheet, an income statement, a statement of changes in equity, a cash flow statement, and notes comprising a summary of significant accounting policies and other explanatory notes. - The purpose of an audit is to form a view on whether the information presented in the financial report, taken as a whole, reflects the financial position of the organisation at a given date, for example: 1. Are details of what is owned and what the organisation owes properly recorded in the balance sheet? 2. Are profits or losses properly assessed? - When examining the financial report, auditors must follow auditing standards which are set by a government body. Once auditors have completed their work, they write an audit report, explaining what they have done and giving an opinion drawn from their work. Generally, all listed companies and limited liability companies are subject to an audit each year. Other organisations may require or request an audit depending on their structure and ownership.
As per SA 200, Basic Principles Governing an Audit, issued by the Institute of Chartered Accountants of India (ICAI), an audit is the independent examination of financial information of any 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.
I. Auditing is the independent examination of financial statements with the objective to give opinion on such financial statements. Independent examination means auditor should not be influenced by any person, he should be independent while conducting audit. II.Financial statements comprises of: 1. Balance sheet 2. Profit and loss account 3. Cash flow statement 4. Notes on accounts 5. receipts and payment account 6. Statement of changes in equity. III. Objective of audit is to give an opinion on financial statements, to see whether the financial statements are free from material misstatements arising due to fraud or error and to check whether the financials statements are prepared as per financial reporting framework