Understanding Audits: Ensuring Financial Accuracy
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Understanding Audits: Ensuring Financial Accuracy
The term audit is derived from the Latin word audire, which means "to hear." An independent review assures the authenticity of accounts. Audits are performed to ascertain the validity and reliability of information.
Primary Function of Auditing
The primary function of auditing is the examination of books and accounts with supporting vouchers and documents to detect and prevent errors and fraud.
Internal Control Systems
The auditor must check the effectiveness of internal control systems to determine the extent of the audit.
Evolution of Auditing
Initially, its meaning and use were confined merely to cash audits. The auditor had to ascertain whether the persons responsible for the maintenance of accounts