It is obligatory for all separate legal entities. A) A partner or a director of the company. A good auditor is not only able to clear your issues quickly, but also helps you improve your company. External Audit: External audit, also known as financial audit and statutory audit, involves the examination of the truth and fairness of the financial statements of an entity by an external auditor who is independent of the organization in accordance with a reporting framework. It has advantage for every type of organization. 11. Who among the following can be appointed as auditor of a company? Importance of Auditing: 6 Reasons Why You Should Audit Your Financial Statements. It is carried out almost continuously. 3. For the benefit of the organisation, quality auditing should only report non-conformances and corrective actions, but should not highlight areas of good practice. A statutory audit is a legal requirement. There are many different types of auditing used these days for the evaluation of the accounting activities. This can definitely enhance the credibility of your commercial organization. financial institutions. a) External b) Interim c) Internal Answer: c) Internal Auditor 6. A team of experts reviews the procedures and operations of an organization and reports it to the management in cases such as non-compliance, lack of control and inefficiency, especially in big organizations where thousands of employees work and the business operations take place from various locations. PARTICULARS OF ORGANISATION NAMES OF AUDITORS 17 Concord Associates Pte Ltd 8, Boon Lay Way, #03-08, 8 @ TradeHub 21, Singapore 609964 Telephone No: 65155247/65155248 Contact person: Mr Bryan Sio Importance of Auditing. Propriety audit refers to a) Verification of accounts b) Examination accounts of propriety concerns c) Enquiry against justification and necessity of expresses d) Audit of Govt. Conversely, the investigation is playing by experts. Auditing is compulsory for a) Small scale business b) Partnership firms c) Joint stock Companies d) Proprietary Concerns 5. And from this came the Statement on Auditing Standards (SAS) No. Internal control, as defined in accounting and auditing, is a process for assuring achievement of an organization's objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies. 100, by –– (i) a person contemplated in paragraph (a); or (ii) a person who is qualified to be appointed as an accounting officer of a close corporation in 10. Types Social audit. An environmental audit is a type of evaluation intended to identify environmental compliance and management system implementation gaps, along with related corrective actions. The book included how to document EDP audits and examples of how to process internal control reviews. However, recently auditing has begun to include non-financial subject areas such as safety, security, information system performance and environmental concerns. Auditors predict the future of an organization by analyzing the past accounting period. Internal control, as defined by accounting and auditing, is a process for assuring of an organization's objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies. Auditing is conducting every year. Internal Audit is not compulsory by nature. The purpose of the statutory audit is the same as the purpose of other audits. 2.0 Definition Of Auditing 2.1 Objective Of Auditing 2.2 Types Of Auditing ... some organization are reaping the good fruit of auditing as a result of enhancing accountability I their organizations while others are wallowing in the doldrums. AUDITING AND TAXATION TY BCOM – AUDITING AND TAXATION – MCQ – QUESTION BANK - COMPILED BY MANOJ VORA. Definition Auditing refers to a systematic examination of books, accounts, documents and vouchers of an organization to ascertain how far the financial statements present a true and fair view of the concern. In this type of auditing, the entity’s management determines the work area. Types of Audit; Audit Program; Kinds of Audit: There are difference kinds of Audit, these are discussed below. Part A (i) • firstly the internal audit is not compulsory by nature and external audit is in the cases of public limited companies. In other words, irrespective of the fact whether audit is compulsory, statutory or voluntary. internal audit and external audit. Types of Auditing. In this way they perform an analogous (similar) function to financial audits.There are generally two different types of environmental audits: compliance audits and management systems audits. companies 6. However some companies also undertake internal audit which implies that company appoints some professional internal auditors to conduct audit of accounts as well as company’s systems and policies. Auditing is continually changing and developing to meet the needs of the business environment it serves. Statutory audit is a compulsory audit. It helps the shareholders to keep themselves protected from any fraud and misrepresentation. Auditing is carried out after the final preparation of the financial statements and accounts. AUDITING MCQs. On the contrary, external audit is obligatory for every organization or every separate legal entity. The auditor and the organization decide if the auditor’s expertise is a good fit. Auditing Professions Act (SAICA is the only body so accredited at the moment); or (b) in the case of a company whose public interest score for the particular financial year was less than . The organization contacts the auditor. Audit or Auditing in India is a system of independently reviewing the records/activities and expressing an opinion thereon. The result of this was the release of Auditing & EDP. In the tax, world audit is referred to the review of a taxpayer’s tax return for accuracy. Auditing is compulsory for listed companies and it is done by the external auditor. 10 11. The external audit is compulsory by law. Auditing is compulsory for a) Small scale business enterprises b) All partnership firms c) All joint stock companies d) All proprietary concerns 5. Status of auditor: An internal auditor is an employee of the company. ANS: B. Auditing is compulsory for every company. Auditing, on the other end of the spectrum, refers to a detailed inspection of financial records or reports of a business or an institute.It is mandatory for all distinct legal bodies. Statutory or Compulsory Audits Under Statutory Audit the rules relating to the scope of the audit, auditor’s qualifications, his rights, duties, and responsibilities, etc. This article is a primer on what auditing is, the purposes, the types, and the objectives of audits. It can be done internally (by employees of the organization) or externally (by an outside firm). As a matter of fact, auditing is a legal requirement for organizations that have the power to exploit financial information for personal gains e.g. An annual audit is compulsory for any organization that processes more than six million credit card transactions per year. Auditing is a standard inspection, whereas investigation is precarious. B) A person of unsound mind. Auditing has two main categories viz. Definition of Auditing: Auditing refers to the critical examination of the financial records or statements of a business or an organization. Auditing can be best understood as an inspection of the company to validate the authenticity of a company’s claims.. A lot of the basic procedures of both accounting and auditing are analogous. Organization cannot restrict the scope of statutory audit. Companies Act 1913 for the first time made it compulsory for ... is an appraisal activity within an organization for the review of the accounting, financial and Find the full details of SAC accredited auditing organization (SAC-AO) at the SAC website. Auditing-B.com 3rd Year Unit I Introduction to Auditing ... is compulsory. Auditing is carried out after the final preparation of the financial statements and accounts. The audit of the accounts of a concern has many advantages and in case of a joint stock company it has been compulsory by law. Of late, internal audit often involves the critical review of the non-financial and operational aspects or activities of the organization, for example, management audit, performance audit, IT audit, etc. e 2 a) Internal b) Voluntary c) Statutory Answer : c) Statutory Audit 5.----- Auditor is the employee of the organization and appointed by the management. The auditor reviews the financial report of the organization, as per the auditing standard set by the government body. Hence it is always a good idea to make use of auditing services even when they are not compulsory for the organization. On the other hand, the investigation is performing as per the need of an organization. Statutory audit provides true and fair view of financial position to shareholders and members of an organization. No fraudulent employee or employer can thrive in any organization where regular audits are made compulsory and complied with. 70. •Internal audit refers to the management of performance within the organization from a separate department whereas the external audit is done outside the organization by the help of a different department. 11 12. It is compulsory for all separate legal entities. Legally internal audit is not compulsory. Chief importance of auditing is as follows: Auditing refers to the careful examination of the financial records of a business organization. Auditing is performing by auditors. Recall the meaning of Internal Check. The role of auditing towards organizational success have attracted comment on the front pages of national newspapers, rather than in just the financial pages have even led on occasion to question and statement in parliament. In addition, the article explains what internal and external audits are and how they differ and the reasons why organizations are required by regulators to perform audits. It is needed when the organization has a good internal control system d) It is expensive 23.Internal check is carried on by a) Staff specially appointed for the purpose are determined by the law, which can be increased by an agreement between the employer of the organization and the auditor, but cannot be decreased in any situation. The importance of auditing cannot be overstated. For service organizations, this is a widely recognized internal control auditing standard. In order to facilitate understanding of the scope and authority of the pronouncements of the Auditing and Assurance Standards Board ('AASB'), the ICAI has issued revised preface viz., Preface to Standards on Quality Control for Auditing, Review, Other Assurance and Related Services, which has come into effect from 1st April, 2008. Auditing is compulsory for a) Small scale business b) Partnership firms c) Joint stock Companies d) Proprietary Concerns 5. In this chapter, we will understand the concept of Internal Audit in Auditing. The auditing firm sends a proposal either to the company or to the attorney for instances where compliance audits should invoke client-attorney privilege. Chartered accountant who is professionally qualified is required for the audit of accounts of companies. A) True B) False. Social audit is a process of reviewing official records and determining whether state reported expenditures reflect the actual monies spent on the ground. Internal audit is not compulsory, but a company can conduct it to review the operational activities of the firm or an organization. I Introduction to auditing... is compulsory for any organization that processes more than six million credit card per... 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