(1) information and the explanations given to him


(1) Spicer and Pegler: “An audit may be said to be such an examination of the books, accounts and vouchers of a business as will enable the auditor to satisfy that the Balance Sheet is properly drawn up, so as to give a true and fair view of the state of the affairs of the business and whether the Profit and Loss Account gives a true and fair view of the profit or loss for the financial period according to the best of his information and the explanations given to him and as shown by the books, and if not, in what respects he is not satisfied.” (2) Montgomery: “Auditing is a systematic examination of the books and records of a business or other organization, in order to ascertain or verify and to report upon the facts regarding its financial operation and the result thereof.

” (3) Lawrence R. Dicksee: “An audit is an examination of accounting records undertaken with a view to establishing whether they correctly and completely reflect the transactions to which they relate. In some instances it may be necessary to ascertain whether the transactions themselves are supported by the authority.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

” (4) A. W. Hanson: “An audit is an examination of such records to establish their reliability and the reliability of statements drawn from them.” (5) R. B. Bose: “Audit may be said to be the verification of the accuracy and correctness of the books of accounts by an independent person qualified for the job and not in any way connected with the preparation of such accounts.

” From a perusal of the above quoted definitions, it becomes quite clear that there is consensus of opinion among various writers on some significant points included in defining the term ‘audit’. Thus, according to them, audit is the systematic and scientific examination of the accounts of a business. The fundamental question is how an auditor should perform this scrutiny to his satisfaction and according to the wishes and instructions of his client. For this, the following definition gives a clue. (6) M. L. Shandilya: “Auditing may be defined as inspecting, comparing, checking, reviewing, vouching, ascertaining, scrutinising, examining and verifying the books of accounts of a business concern with a view to have a correct and true idea of its financial state of affairs.” This definition makes it perfectly clear that an auditor has to inspect, compare, vouch and verify the books of accounts and adopt similar other devices with the ultimate objective of testing their accuracy and correctness.

Only then, he can satisfy himself and report on the correctness or otherwise of the accounts. It he is satisfied, he will say in his report that everything is correct. But if he is not, then he has to point out the extent to which he is not satisfied. Thus, whatever he says in his report will be based on his thorough scrutiny and sincere findings. Briefly speaking, an audit is an intelligent and critical examination of the account of a business as is evident from the various definitions given above, but progressive writers, like Sri A.

K. Chanda, former Comptroller and Auditor-General of India, have now gone still further in expressing their point of view on audit. Objects of an Audit: The main object of audit is to verify the accounts and to report whether the Balance Sheet and the Profit and Loss Account have been drawn properly according to the Companies Act and whether they exhibit a true and fair view of the state of affairs of the concern. Such verification of accounts and reporting to management are vital factors for promoting efficiency and accuracy in the maintenance of accounts so that the owners of bussiness may get accurate information about the financial condition of their business.

The verification of accounts is done to see if they are correct, complete and in conformity with the Law. For this, an auditor has to discover errors and fraud. As stitch, the subsidiary objects of audit are: (i) The detection of errors and fraud, and (ii) The prevention of the recurrence of those errors and fraud. If the accounts of a firm are full of errors and fraud and the auditor is in a position to discover such errors and fraud, he cannot certify them as correct.

If he does so, it will be a great mistake on his part.

x

Hi!
I'm William!

Would you like to get a custom essay? How about receiving a customized one?

Check it out