For the benefit of the organisation, quality auditing should only report non-conformances and corrective actions, but should not highlight areas of good practice. In other words, irrespective of the fact whether audit is compulsory, statutory or voluntary. 11. Who among the following can be appointed as auditor of a company? 3. An annual audit is compulsory for any organization that processes more than six million credit card transactions per year. Statutory audit provides true and fair view of financial position to shareholders and members of an organization. Importance of Auditing. Auditing has two main categories viz. This can definitely enhance the credibility of your commercial organization. Auditing is performing by auditors. Social audit is a process of reviewing official records and determining whether state reported expenditures reflect the actual monies spent on the ground. Internal control, as defined by accounting and auditing, is a process for assuring of an organization's objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies. A) True B) False. Types of Audit; Audit Program; Kinds of Audit: There are difference kinds of Audit, these are discussed below. internal audit and external audit. are determined by the law, which can be increased by an agreement between the employer of the organization and the auditor, but cannot be decreased in any situation. The organization contacts the auditor. AUDITING MCQs. Auditing-B.com 3rd Year Unit I Introduction to Auditing ... is compulsory. The purpose of the statutory audit is the same as the purpose of other audits. It is needed when the organization has a good internal control system d) It is expensive 23.Internal check is carried on by a) Staff specially appointed for the purpose Statutory audit is a compulsory audit. Auditing is continually changing and developing to meet the needs of the business environment it serves. A team of experts reviews the procedures and operations of an organization and reports it to the management in cases such as non-compliance, lack of control and inefficiency, especially in big organizations where thousands of employees work and the business operations take place from various locations. e 2 a) Internal b) Voluntary c) Statutory Answer : c) Statutory Audit 5.----- Auditor is the employee of the organization and appointed by the management. On the contrary, external audit is obligatory for every organization or every separate legal entity. Audit or Auditing in India is a system of independently reviewing the records/activities and expressing an opinion thereon. On the other hand, the investigation is performing as per the need of an organization. Internal control, as defined in accounting and auditing, is a process for assuring achievement of an organization's objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies. Auditing is compulsory for a) Small scale business b) Partnership firms c) Joint stock Companies d) Proprietary Concerns 5. Internal Audit is not compulsory by nature. For service organizations, this is a widely recognized internal control auditing standard. 70. The auditing firm sends a proposal either to the company or to the attorney for instances where compliance audits should invoke client-attorney privilege. In addition, the article explains what internal and external audits are and how they differ and the reasons why organizations are required by regulators to perform audits. Part A (i) • firstly the internal audit is not compulsory by nature and external audit is in the cases of public limited companies. However some companies also undertake internal audit which implies that company appoints some professional internal auditors to conduct audit of accounts as well as company’s systems and policies. The auditor and the organization decide if the auditor’s expertise is a good fit. Find the full details of SAC accredited auditing organization (SAC-AO) at the SAC website. It is carried out almost continuously. The importance of auditing cannot be overstated. Status of auditor: An internal auditor is an employee of the company. A statutory audit is a legal requirement. It helps the shareholders to keep themselves protected from any fraud and misrepresentation. 11 12. Auditing is carried out after the final preparation of the financial statements and accounts. a) External b) Interim c) Internal Answer: c) Internal Auditor 6. 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