OBJECTIVES OF AUDIT | PRIMARY AND SECONDARY OBJECTIVES
Objectives of Audit:
PRIMARY AND SECONDARY OBJECTIVES OF AUDIT
The objectives of audit are proving true and equality of results presented by profit and loss account and financial position presented by the balance sheet. Its objectives are classified into two groups which are given underneath:
1. Primary Objectives Of Audit
The main objectives of audit are called as primary objectives of audit. They are as under:
I. Inspecting the arrangement of an inside check.
ii. Checking arithmetical exactness of books of records, confirming posting, costing, adjusting and so forth.
iii. Confirming the credibility and legitimacy of exchanges.
iv. Checking the correct refinement of capital and income nature of exchanges.
v. Affirming the presence and estimation of benefits and liabilities.
vi. Checking whether all the statutory prerequisites are satisfied or not.
vii. Demonstrating genuine and decency of working outcomes displayed by salary articulation and money related position introduced by accounting report.
2. Subsidiary Objectives Of Audit
These are such objectives which are very useful in attaining primary objectives. They are as under:
i. Detection and prevention of errors
Errors are those oversights which are submitted because of imprudence or carelessness or absence of information or without having a personal stake. Errors might be submitted without or with any personal stake. Along these lines, they are to be checked cautiously. Errors are of different kinds. Some of them are as under:
- · Errors of standard
- · Errors of exclusion
- · Errors of commission
- · Compensating Errors
ii. Detection and prevention of frauds
Frauds are those mix-ups which are submitted intentionally with some personal stake on the heading of best dimension the executives. The board submits fakes to bamboozle assess, to demonstrate the adequacy of the board, to get more commission, to offer in the market or to keep up the market cost of an offer and so on. Recognition of extortion is the primary employment of a reviewer. Such Frauds are as per the following:
- · Misappropriation of money
- · Misappropriation of products
- · Manipulation of records or adulteration of records with no misappropriation
iii. Under or overvaluation of stock
Typically such Frauds are submitted by the best dimension administrators of the business. Along these lines, the clarification was given to the evaluator likewise stays false. Along these lines, an inspector ought to identify such Frauds utilizing expertise, learning, and realities.
iv. Other objectives
- · To give data to pay to assess specialist.
- · To fulfill the arrangement of organization Act.
- · To have a moral impact
