14 Important Definitions Of Auditing
14 Important Definitions Of Auditing

Auditing can be defined as the intelligent and critical test of accuracy, adequacy and dependability of accounting data and accounting statements of a business organization. It is deals with examination of accounting data to determine the extent of accuracy of income statement and balance sheet prepared from such data.

Due to the specialized function of auditing, Auditors enjoy a distinctive professional status in the society. Professional accountants by auditing, certify financial statements of organisations. Audited financial statements gain confidence of shareholders and people that are interested in the organisation.

Some of the important definitions of auditing are discussed below:

1. “Auditing is the examination of the books, accounts and vouchers of the business. The purpose is to satisfy that the balance sheet shows a true and lair view of the state of affairs of the business and the profit or loss derived by the business during the financial period. The auditor, to satisfy himself of the above facts, may obtain such information and explanation that would be necessary in the matter. Further, if he is not satisfied with the position of the business as shown in the balance sheet and profit and loss account, he must report as to why he is not satisfied.”  — Spicer and Pegler.

2. “Auditing is concerned with the verification of accounting data determining the accuracy and reliability of accounting statements and reports.” — R.K. Mautz

3. “Auditing is an examination of accounting records undertaken with a view to establishing whether they correctly and completely reflect the transactions to which they purport to relate.” — L. R. Dicksee

4. “Long range objectives of an audit should be to serve as a guide to management’s
future decisions in all financial matters, such as controlling, forecasting, analysing and reporting. These objectives have their purposes—the improvement of performance.”  — Arthur W. Holme

5. “Audit is not an inquisition and its mission is not one of fault finding. Its purpose is to bring to the notice of the administration lacunae in the rules and regulations and lapses and to suggest possible ways and means for the execution of plans and projects with greater expedition, efficiency and economy.” — A.K. Chanda

6. “An audit is an examination of such records to establish their reliability and reliability of statements drawn from them.” — A. W. Hanson

7. “Audit is an intelligent and critical scrutiny of books of accounts of a business with the documents and vouchers, from which they have been written up, for the purpose of ascertaining whether the working results of a particular period as shown. by profit and loss account and also the financial position as reflected in the balance sheet are truly and fairly determined and presented by those responsible for their compilation.” — J.R. Batliboi

8. “An audit is an investigation by an auditor into the evidence from which the final revenue accounts and balance sheet or other statements, of an organization have been prepared, in order to ascertain that they present a trite and fair view of summarized transactions for the period under review and of the financial state of the organization at the end date, so enabling the auditor to report thereon.” — Taylor and Perry

9. “Auditing is the systematic examination of financial statements, records and related operations to determine adherence to generally accepted accounting principles, management policies or stated requirement.” – R.E. Schlosser

10. “Auditing is the examinations of a Balance Sheet and Profit and Loss Account prepared by others. As a result of his examination of books, accounts, vouchers etc. and of his inquiries, the auditor must satisfy himself that such balance sheet and profit and loss account are properly drawn up so as to exhibit a true and fair view of the state of affairs and of the earning of a particular concern.” — F.R.M. Depaula

11. Another writer has defied auditing as “Auditing is an investigation. of some statements of figures involving examination of certain evidence so as to enable an auditor to make a report on statements.”

12. “Modern audit is the verification of financial statements, usually a Balance Sheet and Profit & Loss Account in the light of certain accounting principles to establish whether or not it is true statement and correctly drawn up.” – R.R. Comber

13. “Auditing is a systematic and independent examination of data, statements, records, operations and performances (financial or otherwise) of an enterprise for a stated purpose. In any auditing situation, the auditor perceives and recognizes the propositions before him for examination, collects evidence, evaluates the same and on this basis, formulates his judgment which is communicated through his audit report. ” — Institute of Chartered Accountants of India

14. “An audit is independent examination of financial information of any entity, whether project oriented or not, and irrespective of its size or legal Pm, when such an examination is conducted with a view to expressing an. opinion thereon. ” — Standard Audit Practices–I

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