What is auditing and explain its features?
Features of an Audit Auditing is a systematic process. It is a logical and scientific procedure to examine the accounts of an organization for their accuracy. There are rules and procedures to follow. The auditor must completely satisfy himself with the accuracy and authenticity of the financial statements.
What are the main features of the audit report?
The audit report is, sometimes, also referred as the clean opinion. An audit report includes three paragraphs – the first stating the responsibilities of the auditor and directors; the second stating the use of GAAP; and finally the third paragraph stating the auditor’s opinion.
What are 3 types of audits?
There are three main types of audits: external audits, internal audits, and Internal Revenue Service (IRS) audits. External audits are commonly performed by Certified Public Accounting (CPA) firms and result in an auditor’s opinion which is included in the audit report.
What are the features of management audit?
An effective audit management system possesses the following key features: Manages complete audit lifecycle including audit planning, audit plans, checklists, field data collection, development of audit reports and corrective and preventive action recommendations.
What are the types of Auditors report?
The four types of auditor opinions are: Unqualified opinion-clean report. Qualified opinion-qualified report. Adverse opinion-adverse audit report.
What are the features of cost audit?
Cost Audit (1) It is not compulsory except in certain cases as provided under section 233B. (2) It covers only cost records and cost accounts. (3) It aims to verification of cost accounts and ensures the plan prepared in this connection has been duly executed. (4) It concerned with forward looking approach.
What is the main objectives of cost audit?
The basic objective of cost audit is to ensure that the cost of production as well as cost of sales includes only those factors which are absolutely necessary and that those factors are used in the most efficient way. To verify that cost accounts/records are accurate.
What are the duties of an auditor?
Duties of the Auditor
- Prepare an Audit Report.
- Form a negative opinion, where necessary.
- Make inquiries.
- Lend assistance in case of a branch audit.
- Comply with Auditing Standards.
- Reporting of fraud.
- Adhere to the Code of Ethics and Code of Professional Conduct.
- Assistance in an investigation.
Who are called as cost auditor?
Who can be a Cost Auditor? According to section 148(3) of Companies Act 2013, cost audit shall be conducted by Cost Accountant in Practice who shall be appointed by the Board on such remuneration as determined by the members in such a manner as may be prescribed.
How many types of cost audits are there?
Difference between Financial Audit and Cost Audit
| Financial Audit | Cost Audit |
|---|---|
| It aims to examine that business transactions have been recorded correctly. | It aims to verification of cost accounts and ensures the plan prepared in this connection has been duly executed. |
How do you become a cost auditor?
The person to be appointed as auditor must hold a certificate of practice from the Institute of Cost and Works Accountants of India. Consent of the cost auditor should be obtained before making an appointment.
Who will appoint special auditor?
the Central Government
Is Auditing compulsory?
Thus, a compulsory tax audit is required to be completed by a Chartered Accountant if a business has a total sales turnover of over Rs. 1 crore. In case of a profession, if the profession has total gross receipts of more than Rs. 50 lakhs, then tax audit by a Chartered Accountant is mandatory.
Who appoints primary auditor?
The Board of Directors appoints the first auditor of a company. The appointment has to be done within 30 days from the date of registration of the company. Additionally, the members of the company can also appoint an auditor by conducting an Extraordinary General Meeting within 90 days of receiving such information.
What is the main object of auditing?
The objective of an audit is to form an independent opinion on the financial statements of the audited entity. The opinion includes whether the financial statements show a true and fair view, and have been properly prepared in accordance with accounting standards.
What is qualification of auditor?
To become an auditor, the candidate must have a bachelor’s degree in Accounting. However, some employers prefer candidates with a relevant master’s degree in accounting or an MBA. Candidates can also take up a course in computer accounting software such as Tally or other related diplomas.
IS Auditor a good job?
It’s a job in high demand. As long as there is business to be done, there will be a job for auditors. Experts say the number of jobs for accountants and auditors will grow 11 percent from 2014 to 2024, faster than the average for many other occupations.
Who is called auditor?
An auditor is a person or a firm appointed by a company to execute an audit. To act as an auditor, a person should be certified by the regulatory authority of accounting and auditing or possess certain specified qualifications.