1.1.1.

Purposes of Auditing

Dependable financial information is essential to the very existence of the society. In making a
decision, such as, to buy or sell securities, the banker deciding to approve a loan; the government
to obtain revenue based on income tax returns etc, all are relying upon information provided by
auditors.
There are many advantages of auditing to the modern society. The more important of these are
as follows.

A. Tool of Control over Resources

The most advantage of auditing is that it acts as a tool of control over those who harm resources
belonging to others. In the case of government, audit seeks to ensure that the use the public
funds properly. Whenever a person or authority is entrusted with the resources belonging to
others, it becomes necessary to exercise suitable control over such people by officials to ensure
that the resources are used properly. Audit can act as an important instruction of practicing such
control. Experiences of certain countries show that whenever the audit becomes weak, there was
a gross misuse of public funds. Thus, audit acts as a mere protection against misuse of funds and
reduces the possibility of errors and frauds.