**PRINCIPLES OF AUDITING :-**
Fundamental principles are those according to which the books of business accounts are audited. These principles can be changed according the desire of the auditor.
We discuss the main principles of auditing under these headings :
1. Planning :-
It is the basic principle of auditing. The auditor should plan before starting the work. In planning auditor decides accounting about the system and internal control procedure.
2. Honesty :-
Honesty and sincerity is the second important principle of auditing. The loyalty of auditor to work and profession must be beyond the doubts.
3. Impartiality :-
In case of audit the attitude of the auditor must be impartial. Keeping in view this principle his personal views may not be included in the audit report.
4. Secrecy :-
Secrecy must be maintained by the auditor during the process of audit. He cannot disclose any information to the third party.
5. Evidence :-
During the audit the auditor can collect the evidence through the working papers. He can frame his opinion on the audit evidence. The nature and source of evidence must be kept in view by the auditor.
6. Consistency :-
It is an important principle of auditing. In case of selecting the rates of depreciation and valuation of stock the accountant must follow the rates of the coming years. In this regard there should be consistency and changes are not acceptable.
7. Legal Frame Work :-
The business activities may run within the rules and legal formalities. To protect the rights of the interested parties rules must be applied.
8. Working Paper Preparation :-
The auditor collect documents providing evidence that audit was carried out according the principles. The auditor prepares the working paper and kept in this custody as a proof.
9. Internal Control :-
The auditor will examine the accounting system and inter control. To frame his opinion, he keeps in view the evidence obtained from the books.
10. Report :-
According the principle of auditing a report will be prepared by the auditor at the end. It may be conditional or unconditional. The auditor can draw conclusion and disclose the facts and figures about the business for general information.