Types of audits, Auditing

Types of audits

So far we have tended to think in terms of the audit of limited companies, and indeed, the emphasis throughout this text will be on such companies incorporated under the Companies Act 1962, not least because this type of audit situation is at the heart of the vast majority of auditing examination questions. However, it might be convenient at this stage to briefly indicate the main classes of audit which are undertaken in practice. There are two types of audits as follows: Statutory Audits and Non-Statutory Audits.


Statutory Audits:  

Audits are obligatory under statute in the case of a large number of undertakings including the following:

Non-statutory Audits:

Non-statutory audits are performed by independent auditors because the owners, proprietors, trustees, members, proficient and governing bodies or other interested parties desire them, not because the law needs them.

In consequence, auditing may and will extend to every type of undertaking which produces accounts, and will include therefore:

a) Clubs;
b) Charities (assuming an audit is not in any event statutory);
c) Sole traders; and
d) Partnerships

It may also extend to forms of financial statement other than the annual reported figures where those responsible for the statement, or those to whom the statement is made, wish an independent opinion to be expressed as to whether it gives a true and fair view.  Examples would include:

a) Summaries of sales in support of a statement of royalties’ payable where goods are sold under license;
b) Statements of expenditure in support of applications for regional development or other governments grants; and
c) The circulation figures of a newspaper or magazine, used when soliciting advertising.

In all such audits the auditor must have regard to any regulations concerning financial statements which are contained in the internal rules or constitution of the undertaking. Examples of the regulations which would be essential reference material for the auditor in such assignments would include:

a) The Rules of Clubs, Societies and Charities
b) Partnership agreements.

Posted Date: 12/3/2012 4:43:36 AM | Location : United States







Related Discussions:- Types of audits, Assignment Help, Ask Question on Types of audits, Get Answer, Expert's Help, Types of audits Discussions

Write discussion on Types of audits
Your posts are moderated
Related Questions
hi, im a preformer and i want to know should i be myself duing an audition or should i act proper ans sweet like everyone els


IAS 12 Income Taxes 1AS 12 needs a deferred tax liability should be well known for all taxable temporary difference with minor exceptions as goodwill that is not allowable for

Recognize the Related Parties The auditor should review information provided through the management and directors recognize the names of all identified related parties and sho

Classification of Individual Business Risk Individual business risk can be low or high impact and low or high likelihood. Here are some illustrations for a satirical magazine.

Stock Taking - Audit Process The procedures for carrying out physical stock taking vary in detail according to the circumstances and size of the business and the life of its

should your test for unrecorded liabilities be affected by the fact that a letter is obtained in which a responsible management official certifies that to the test of his knowledge

Simple Trust - This type of TRUST is essential to distribute all its income currently, whether or not the TRUSTEE actually does so and it has no provision in trust instrument for c

B. For the one activity/process you ranked the most significant, identify and evaluate four risks. a. Two of the risk should be high to medium significance, and at least one shoul

Irregularities: Irregularities can be explained as intentional distortions of financial statements for whatever reason and also as misappropriation of possessions whether or no