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Introduction to Auditing
Let’s learn about Auditing. The word audit means a thorough analysis of the books of accounts with an objective to verify the financial position disclosed by the financial statements containing the financial information.
Definition of Auditing
A precise definition of the term ‘Auditing is difficult to give. Some of the definitions given by different authors are as follows:
“Auditing is a systematic examination of the books and records of a business or the organization in order to ascertain or verify and to report upon the facts regarding the financial operation and the result thereof.”
“An audit is an examination of accounting records undertaken with a view to establishing whether they correctly and completely reflect the transaction to which they relate. In some instances, it may be necessary to ascertain whether the transactions themselves are supported by authority.
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. The Auditor will have to go through various books and accounts and related evidence to satisfy him about the accuracy and authenticity to report the financial health of the business.
