Functions Of Audit or Auditing
Functions Of Audit or Auditing

Auditing is a branch of Accounting. An auditor is an accountant but not all accountants are auditors.

Auditing means the following:

  • A study of organization and its structure.
  • Analysis and review of systems of accounting and internal control.
  • Testing arithmetical accuracy of records and collection and evaluation of evidence in support of transactions.
  • Verification of state of affairs disclosed by the balance sheet and profit or loss disclosed by profit and loss account.

Some important functions of auditing can be analysed as follows:
1. Reviewing the systems and procedures of business.
2. Examining documentary evidence so as to ascertain the accuracy of recorded financial transaction.
3. Auditing helps to review the system of accounting and internal control.
4. To verify the existence and value of assets.
5. To examine the degree of mathematical accuracy of accounting statements.
6. To see whether the statutory requirements have been complied with.
7. Reporting as to what extent, accounts exhibit truth and fairness.
8. To make recommendations on areas to improve in internal control and accounting system.
9. To verify the differences between capital and revenue items.

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