1. How Audit takeplace as controlMISS- GEETA UDAPIKAR.

2. CONTENT 1 Introduction . 2 Definitions. 3 Main Objectives. 4 Scope. 5. Types. 6. Importance. 3. Introduction The general meaning of an audit is anevaluation of aperson, organization, system, process, enterprise, project or product.Audit means an unbiased examinationand evaluation of the financialstatements of an organization. It can bedone internally (by employees of theorganization) or externally (by anoutside firm). 4. Definitions. Spicier and Pegler-An audit is such anexamination of the books, accounts andvouchers of a business as it enable theauditor to satisfy that the BalanceSheets is properly drawn up, so as togive a true and fair view of the state ofthe affairs of the business and whetherthe profit and loss accounts gives a trueand fair view of the profit or loss for thefinancial period according to the best ofhis information and explanations givento him and as shown by the books, andif not, in what respects he is notsatisfied. 5. Definitions Montgomery -Auditing is a systematicexamination of the books and records ofa business or other organization, in orderto ascertain or verify and report upon thefacts regarding its financial operationand the result thereof. 6. Main Objectives. To independently identify information which is essential to develop an overall picture of the institution/local authority. To identify any weaknesses or administrative flows which otherwise would not be identified due to unwillingness or inability by insiders of the institutions. . 7. Main Objectives To identify strengths and weaknesses ofthe administrative structures in order toinform decisions on overallstrengthening of the institution. To provide baselines on which reformscan be assessed To provide the government (othergoverning bodies) and general publicwith credible information that result inpublic faith or trust of the institutionand/or pressure for any reforms toaddress problems identified. 8. Scope. 1. Legal Requirements. 2. Entity Aspects. 3 Reliable Information. 4. Proper Communication. 5. Evaluation.6. Test.7. Comparison.8. Judgments. 9. Types. There are main two type of audit. 1.internal audit. 2.statutory audit. Other types of audit are;- 1.continuous audit. 2.annual audit. 3.balance sheet audit. 4.interim audit. 10. Importance. For Business 1. Errors are Located- Auditing is helpfulfor business. The error can be locatedthrough it. The location and correction oferror is possible through auditing. Thetrue and fair information about businessis available. 11. Importance.2. Frauds are Discovered- Auditing is helpful forbusiness. The discovery of fraud is possiblethrough it. The guilty persons can be heldresponsible. The auditing accounts show fairabout business.3. Loans Become Easy Auditing is useful forbusiness. Lenders for granting loans acceptthe auditors accounts. The reputation ofborrowers increases due to auditing. Thusauditing accounts help the businessman toexpand his activities. 12. Importance. 4. Advise about Weakness The people canseek advise from auditors. The auditors areprofessional and they know their workvery well. They can spotlight the grey area.It is the duty of the business man to actupon the advise of the auditors.5. High Moral ValuesAuditing is essential for business. There ismoral check on the management and 13. Importance. other staff. Auditing puts the pressure on thestaff of work honestly. There is no pendingwork so there is less chance of errors andfrauds. . 6. Tax Payments- Auditing is useful forbusiness, tax authority accept auditedaccounts for assessment of taxes. There is nofurther inquiry or investigation fromdepartment.. 14. Importance. For Owners 7. Efficiency ImprovesAuditing is beneficial for business. Theauditing determines the efficiency ofemployees. The training and qualifiesmanagement is an asset for any business.Such management can play dynamic rolein framing and implementing thepolicies. 15. Importance 8. Dispute is Settled - The auditedaccounts are helpful to settle thedisputes. The audited accounts becomethe basis of making decisions. Thedispute may relate to infringement ofpatents or trademarks. 9. Improvement of Internal ControlAuditingis helpful for business. The auditor canpoint out the 16. Importanceweakness of internal control system. Thebusiness management can take steps toremove these weaknesses. The effectivecontrol systems are essential for large-scalebusiness enterprises.10. Fluctuation in Profits The auditor canmake the detailed study to find of fluctuationin profits. There are various reasons forchanges in profits. The auditor candetermine the true cause of such changes. 17. Importance 11. High Credit Rating The auditingaccounts increase the credit standing of anybusiness house. The lenders can rely onaudited accounts for granting credit facility.In fact auditing is a screening test ofbusiness entity.12. Shareholders Protection Auditing isbeneficial for owners. The shareholders feelthat their rights are 18. Importanceprotected through auditing. They can knowthe performance of management. Auditedaccounts help to determine the value ofshares.13. Insolvency The auditing is beneficial forcreditors. The audited accounts show trueand fair view of state of affairs of soleproprietorship or partnership. The creditorcan get their money first and then ownerscan get refund of capital. The auditedaccounts help to settle the cases at an earlydate. 19. Importance For Government 14. Better Performance of Tax Department Auditing is beneficial forgovernment. Tax officers accept theaudited accounts. The assessment ordercan be issued without further clarification.There is saving of money and time due toaudited accounts. The performance of taxofficers is improved. 15.Progress of EconomyAuditing is essentialfor government policies. The true fairview is stated in audited accounts. 20. Importance The stage of economic progress can bedetermined. The government can takemeasures to raise the rate of economicgrowth. 16.Purchase of Private BusinessAuditing is helpful for government.The private business houses may not work infavor of general public. The government cantake over such business units. The purchaseprice is decided on the basis of auditing ofaccounts. 21. Importance 17.Inspectors- The auditing is helpful forgovernment. The auditing accounts showthe fair value of all assets. The value ofassets. The value of assets is the basis oftax. This issue can be settle throughaudited accounts. The auditors areexperts in their field. They know allmethods of property valuation. They canissue certified the government agenciesfor valuation of property . 22. Importance For General Public 18.Insurers can Settle Claims Auditing isessential for insurers. The settlement offire or marine insurance claims is easythrough audited accounts. The policyholders and insurance company cansettle actual loss of property . 23. Importance 19.No Loss to Lenders Auditing is essential forlenders. The banks and other lenders askthe borrowers to submit audited accountsbefore granting loans. The auditedaccounts are helpful to check the trustworthiness of customers. 20.Creditor are Protected They can know the trueperformance of their debtors. The creditorcan accept this promise only 24. Importance when he feels that debtor is reliablebusinessman. Auditor accounts providebasic information about reliability.21.Better Pay to EmployeesAuditing ishelpful for employees. They are interestsin profits. Auditing accounting provetrue and fair view of profit. 25. Importance The employees can demand higher pay, fringe benefits and participating in profits. Audit of accounts with the independent person help the employees to make settlement with the employers. 26. Thank you.