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What Are The Objectives Of An Audit?

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The dominant principle of audit is the examination by an independent person of the accountsor statement made by an accountable party with a view to reporting to the person to whom the account is rendered on its truth or falsity. The discovery of errors, fraudulent or otherwise although frequently supposed to the main object of audit and in practice of great importance, is only a part of the general purpose. In the Act nowhere the question of discovery of fraud in relation to the auditor's responsibility is discussed although negligence on his part leading to the failure to discover defalcations would normally render him liable in damages. Where an undertaking whose accounts being audited is large, greater reliance has to be place on the system in use of the prevention and detection of misappropriations and errors. Therefore the auditor has to use test checking techniques to ascertain whether the system is satisfactory and is being efficiency carried out. In smaller audits more detailed work will have to be done as the system of internal check would be lacking. The audit objectives are classified as under: The detection and prevention of errors or mistakes. The prevention and detection of loss to the client by reason of fraud or misrepresentation resulting in the accounts being false or incomplete. Anonymous
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The objectives of cost audit is to make more profits.

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hat Are The Advantages Of Cost Audit?

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To the Management o Management gets reliable data for its day-to-day operations like price fixing, control, decision making, etc. O A close and continuous check an all wastage's will be kept through a proper system of reporting to management. O Inefficiencies in the working of the company will be brought to light to facilitate corrective action. O Management by exception becomes possible through allocation of responsibilities to individual managers. O System of budgetary control and standard costing will be greatly facilitated. O Reliable check on valuation of closing stock and work-in-progress can be established. O Helps in detection of frauds and errors. To the shareholders Cost Audit ensures that proper records are kept as to purchases and utilisation of material and expenses incurred on wages, etc. It also makes sure that the valuation of closing stock and work-in-progress is on a fair basis. Thus, the shareholders are assured of a fair return on their investment. Anonymous
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What Are Disadvantages Of Audit?

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Expensive, audit fees typically amount to 5% of turnover. Disruption to employees and manager's work Cost of time utilised by the managers in answering auditor's question and providinginformation, evidence and explanations/ Anonymous
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Auditing can be failed due to the inefficiency of the auditors, and a manipulations that are made knowingly is very difficult to audit . Anonymous
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Was this answer helpful? Yes | No Auditing fails to check planned frauds. The management can play tricks to manipulate the accounts in order to conceal their inefficiencies. The frauds committed in such circumstances are not disclosed. The audited accounts can not show true and fair view. Auditing is based on many certificates taken from management and other persons. These certificates may not disclose true information. Auditing may fail to provide desired result. When certificates provide wrong information, the financial statements can not show correct position. Auditing fails to disclose correct information. The background of entries may not be clear to the audit staff. The management may not provide correct clarifications. The auditor is bound to present his report even if the clarification is not true. The auditing fails to help many persons who rely on audit report. The auditing does not show cent per cent true picture. The auditor is concerned with the facts and figures shown in the books of accounts. When figures have been manipulated, the auditing fails to disclose true picture. The purpose of audit fails when it is unable to depict real scene of business affairs. The auditing fails to present correct view. There are limitations of accounting. So accounting figures are not facts. These are based on opinion. Moreover the auditor has to make judgment on various matters. Anonymous
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