{"id":7945,"date":"2013-01-29T08:57:45","date_gmt":"2013-01-29T08:57:45","guid":{"rendered":"http:\/\/vskills.in\/certification\/tutorial\/?p=7945"},"modified":"2024-04-12T14:13:56","modified_gmt":"2024-04-12T08:43:56","slug":"purpose-of-auditing","status":"publish","type":"page","link":"https:\/\/www.vskills.in\/certification\/tutorial\/purpose-of-auditing\/","title":{"rendered":"Business Accounting Tutorial | Purpose of Auditing\u00a0"},"content":{"rendered":"\n<p><\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><a ref=\"magnificPopup\" href=\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2020\/12\/MEANING-AND-SCOPE-OF-ACCOUNTING-56.png\"><img loading=\"lazy\" decoding=\"async\" width=\"750\" height=\"400\" src=\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2020\/12\/MEANING-AND-SCOPE-OF-ACCOUNTING-56.png\" alt=\"Purpose of Auditing\u00a0topic details\" class=\"wp-image-92595\" srcset=\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2020\/12\/MEANING-AND-SCOPE-OF-ACCOUNTING-56.png 750w, https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2020\/12\/MEANING-AND-SCOPE-OF-ACCOUNTING-56-300x160.png 300w\" sizes=\"auto, (max-width: 750px) 100vw, 750px\" \/><\/a><\/figure>\n<\/div>\n\n\n<p><a href=\"https:\/\/www.vskills.in\/certification\/tutorial\/business-accountant\/\" target=\"_blank\" rel=\"noreferrer noopener\">Go back to Tutorial<\/a><\/p>\n\n\n<p>Let&#8217;s learn about the purpose of auditing. The overall purpose of an audit function is to provide for verification of records, processes, or functions in a sufficiently independent manner from the institution or subject being audited in order to add its value and improve its operations. Specifically, its objectives are:<\/p>\n<ul>\n<li>&nbsp;To independently identify information this is essential to develop an overall picture of the institution\/local authority.<\/li>\n<li>&nbsp;To identify any weaknesses or administrative flows which otherwise would not be identified due to unwillingness or inability by insiders of the institutions.<\/li>\n<li>&nbsp;To identify strengths and weaknesses of the administrative structures in order to inform decisions on overall strengthening of the institution.<\/li>\n<li>&nbsp;To provide baselines on which reforms can be assessed.<\/li>\n<li>&nbsp;To provide the government (other governing bodies) and general public with credible information that result in public faith or trust of the institution and\/or pressure for any reforms to address problems identified<\/li>\n<\/ul>\n<h3><strong>Types of Auditing<\/strong><\/h3>\n<h4><strong>(i) Statutory Audit<\/strong><\/h4>\n<p>Statutory audit can be defined as audit which is compulsory as per the acts, laws and provisions of the organization. The appointment of the auditors, qualification, disqualifications remuneration, rights, liabilities, etc. are all mentioned in the relevant mother act of the organization. The companies or undertakings are compulsorily required to conduct their statutory audit as it is not optional in nature.<\/p>\n<h4><strong>(ii) Tax Audit<\/strong><\/h4>\n<p>Tax audit is the type of auditing which is conducted as per the provisions of Income Tax act. The main sections under which tax audit is required are: sec 44AB, 44AD, 801 A, 801AA etc.<\/p>\n<h4><strong>(iii) Private audit<\/strong><\/h4>\n<p>Private audit is the one which is not mandatory by law. Hence, it is known as private audit although there is no binding but it is opted by many small trades and individuals. The entities that practice private audit are Sole trader, Partnership firms, Individuals and institutions.<\/p>\n<h4><strong>(iv) Government Audit<\/strong><\/h4>\n<p>A separate department in the name of account and Audit Department is maintained by the government for performing the auditing of its different departments and offices. This department (Accounts and Audit Department) is headed by the Comptroller and Auditor General of India who is assisted by different officials at various levels.<\/p>\n<h4><strong>(v) Internal Audit<\/strong><\/h4>\n<p>Internal audit is aimed to add value and improve organizations operations being directed by the management. The Institute of Internal Auditors defines internal auditing as an independent appraisal activity within an organization for reviewing the accounting, financial and other operations as a basis for protective and constructive service to the management. It is a type of control which functions by measuring and evaluating the effectiveness of other types of control. It deals primarily with accounting and financial matters but it may also properly deal with matters of operating nature.<\/p>\n<h3><a href=\"https:\/\/www.vskills.in\/practice\/business-accountant\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-92060 aligncenter\" src=\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2020\/12\/Add-a-subheading.png\" alt=\"certified business accountant free practice test\" width=\"960\" height=\"150\" srcset=\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2020\/12\/Add-a-subheading.png 960w, https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2020\/12\/Add-a-subheading-300x47.png 300w\" sizes=\"auto, (max-width: 960px) 100vw, 960px\" \/><\/a><\/h3>\n\n\n<p><a href=\"https:\/\/www.vskills.in\/certification\/tutorial\/business-accountant\/\" target=\"_blank\" rel=\"noreferrer noopener\">Go back to Tutorial<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Go back to Tutorial Let&#8217;s learn about the purpose of auditing. The overall purpose of an audit function is to provide for verification of records, processes, or functions in a sufficiently independent manner from the institution or subject being audited in order to add its value and improve its operations. Specifically, its objectives are: &nbsp;To&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"categories":[3333],"tags":[6716,2882,2883,2957],"class_list":["post-7945","page","type-page","status-publish","hentry","category-business-accounting","tag-business-accountant","tag-business-accountant-certification","tag-certification-business-accountant","tag-purpose-of-audit"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Business Accounting Tutorial | Purpose of Auditing<\/title>\n<meta name=\"description\" content=\"The overall purpose of an auditing is to provide for verification of records, processes or functions in a sufficiently independent manner from the...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.vskills.in\/certification\/tutorial\/purpose-of-auditing\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Business Accounting Tutorial | Purpose of Auditing\" \/>\n<meta property=\"og:description\" content=\"The overall purpose of an auditing is to provide for verification of records, processes or functions in a sufficiently independent manner from the...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.vskills.in\/certification\/tutorial\/purpose-of-auditing\/\" \/>\n<meta property=\"og:site_name\" content=\"Tutorial\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/vskills.in\/\" \/>\n<meta property=\"article:modified_time\" content=\"2024-04-12T08:43:56+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2020\/12\/MEANING-AND-SCOPE-OF-ACCOUNTING-56.png\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/purpose-of-auditing\/\",\"url\":\"https:\/\/www.vskills.in\/certification\/tutorial\/purpose-of-auditing\/\",\"name\":\"Business Accounting Tutorial | Purpose of Auditing\",\"isPartOf\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/purpose-of-auditing\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/purpose-of-auditing\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2020\/12\/MEANING-AND-SCOPE-OF-ACCOUNTING-56.png\",\"datePublished\":\"2013-01-29T08:57:45+00:00\",\"dateModified\":\"2024-04-12T08:43:56+00:00\",\"description\":\"The overall purpose of an auditing is to provide for verification of records, processes or functions in a sufficiently independent manner from the...\",\"breadcrumb\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/purpose-of-auditing\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.vskills.in\/certification\/tutorial\/purpose-of-auditing\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/purpose-of-auditing\/#primaryimage\",\"url\":\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2020\/12\/MEANING-AND-SCOPE-OF-ACCOUNTING-56.png\",\"contentUrl\":\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2020\/12\/MEANING-AND-SCOPE-OF-ACCOUNTING-56.png\",\"width\":750,\"height\":400},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/purpose-of-auditing\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.vskills.in\/certification\/tutorial\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Business Accounting Tutorial | Purpose of Auditing\u00a0\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/#website\",\"url\":\"https:\/\/www.vskills.in\/certification\/tutorial\/\",\"name\":\"Tutorial\",\"description\":\"Vskills - 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