TYPES OF AUDIT

PREPARED BY BHAVESH JAIN T.Y.B.Com/A 8027 TO : Prof. LASUNE

TYPES OF AUDIT

BASED ON AUTHORITY

BASED ON SCOPE

BASED ON TIME

BASED ON OBJECT

OTHER TYPES

BASED ON

AUTHORITY

STATUTORY AUDIT : It is the audit which is compulsory

under the law. All the duties related to auditor are governed as per the provision of the respective law applicable to the organization.

NON-STATUTORY AUDIT : It is voluntary audit. It is

carried at the discretion of the priority. There is no specific law which governs the conduct of such audit. A) Private audit : The audit which is done for the satisfaction of the owner. B) Audit of sole proprietor : Audited account of sole proprietors helps in getting reliable information about tax & properties.

C) Partnership audit : Its helps valuation of goodwill & to prevent disputes among partners. D) Audit of Trust : Its helps to ensure that affairs of trust are managed properly.

INTERNAL AUDIT : It is an independent

management function which involves continuous & critical appraisal of the function of the entity. The object is to suggest the improvement to the function of the entity & add value to an entity.

BASED ON

SCOPE

COMPLETE AUDIT : In this type of audit the auditor

is required to say each & every transaction recorded in the books of accounts. In this type of audit the auditor is not required to examine all the books of accounts.

PARTIAL AUDIT : An audit which is conducted

considering particular area of accounting. Audit of whole account is not conducted.

BASED ON

TIME

CONTINUOS AUDIT : It is one where the auditor or

his staff is continuously engaged in the checking the accounts during the whole period or where the auditor or his staff attains at regular or irregular during the period.

FINAL AUDIT : It generally starts after the

completion of the accounting year when the books of accounts are balanced & closed.

INTERIM AUDIT : It is a kind of audit which is

conducted between two annual or final audits. It is conducted to find out the interim profit & know the financial position at the end of the part of the year.

CONCURRENT AUDIT : It is system of audit which is

prevalent in large bank. It is an examination of specific transactions or examination which is carried out at the earliest. The object is to ensure adherences to prescribe the system & procedure.

BALANCE SHEET AUDIT : It means verification of

the items availing in the balance. It includes verification & valuation of assets & liabilities appearing in the balance sheets

BASED ON

OBJECT

SPECIAL AUDIT : Under Sec 233(A) of the

Companies Act 1956, the Central Govt. has a power to direct the special audit under following circumstances :

When a company not managed as per principles. A company is like to calls serious injury or damage
to the interest of industries.

When a company becomes insolvent.

COST AUDIT : Under Sec 233(B) of the Companies
Act 1956, the Central Govt. may direct & cost audit on the following circumstances :

To grant price concession. To fix up selling price. To safeguard the interest of customer. To ascertain the loss.

MANAGEMENT AUDIT : It is a audit of managerial

functions which involves examinations of plans, policies, procedure, methods & strategies of business.

SOCIAL AUDIT : Audit of social responsibilities

towards society, government, customers & business ethics is known as social audit.

OTHER TYPES
OCCASIONAL AUDIT : It is conducted where there
is need of it. The owners decide to check their accounts. The admission of new partner & loan application requires audit of accounts.

CASH AUDIT : Full or partial audit of cash

transactions over a specific period to determine if :

All cash is received is properly recorded. All disbursements are properly authorized &
documented.

OPERATIONAL AUDIT : It tests a companys internal

systems & procedures used to produce its goods & services. This audit tests production operation for efficiency & effectiveness.

TAX AUDIT : It aims to ensure that the income of

the concern is computed in accordance with the provisions of Income Tax Act.

IN-DEPTH AUDIT : It doesnt mean 100% checking.

It is detailed examination of the selected transactions from the beginning to the end. Thus, it is used along with test checking.

THE END