AUDITING : THE MOST RELIABLE ECONOMIC GUARD

INTRO
DUCTI
ON
In todays
society the
exercise of an
auditors to the
economic and
ethicalleadershi
p sets the
bounding
standard or in
other words
equips an
auditorin such a
way that
recognizes him
as a reliable
body. With the
growingconscio
us recognition
of the
importance of
financial data in
the ordering
of everyday
business and
economic life,
the need of
basic economic
facts
isproviding a
constantly
enlarging
opportunity
for the
accountingprof
ession. The
auditors'
reports have an
especial
capacity to
fulfill theneed
for reliable and
authoritative
financial
material not
only because
of the
reputation or
prestige of the
certified
statements, but
also because
of the
significance
generally
attached by the
business man to
the functionsof
the auditor and
his reports.
These
functions, and
the scope of
thesereports,
have in the past
been definitely
related to the
character of
andchanges in
business
activity.Audits
and reviews are
basically
procedures
performed on
the
financialstatem
ents of a
company, for
the purpose of
determining
whether
thefinancial
statements
include any
material
misstatements.
Misstatementsa
re essentially
wrong numbers
due to
numerical
errors, fraud, or
errors
ininterpreting
the accounting
rules.
Misstatements
are material if
they arelarge
enough to make
a difference to
a user of the
financial
statements,such
as a bank or
investor. And
the person who
involved in
auditing
isknown as
auditor. It also
provides the
techniques
necessary to
examinethe
internal control
system of a
company and
perform
operational
orcompliance
audits by
internal or
external
auditors. The
early
conceptions of
the functions
of the auditor
were such as
toconfine him
to the duties of
a mere checker
and verifier of
debits
andcredits. As
business
became more
complex in its
interrelationshi
ps therehas
been a
compensating
broadening
demand for the
acceptance of
newand
formerly
unrecognized
responsibilitie
s by the
auditor. This
ha