Auditing Objectives and Errors

What are the objectives of auditing

AAS-1 describes the basic principles, which govern the auditor's professional responsibilities and which should be complied with whenever an audit is carried out. These are:-

1. Integrity, objectivity and independence:

The auditor should be straightforward, honest and sincere in his approach to his professional work. He must be fair and must not allow prejudice or bias to override his objectivity.

Confidentiality:

The auditor should respect the confidentiality of information acquired in the course of his work and should not disclose any such information to a third party without specific authority or unless there is a legal or professional duty to disclose.

Skill and competence:

The audit should be performed and the report prepared with due professional care by persons who have adequate training, experience and competence.

Work performed by others:

Auditor may rely on work done by others i.e. other auditors or experts or his assistants provided he exercised due skill and care and there is nothing to doubt.

Documentation:

The auditor should document matters, which are important in providing evidence that the audit was carried out in accordance with the basic principles.

Planning:

The auditor should plan his work to enable him to conduct an effective audit in an efficient and timely manner.

Audit evidence:

The auditor should obtain sufficient appropriate audit evidence through the performance of compliance and substantive test procedure.

Accounting system & internal control:

The auditor should gain an understanding of the accounting system and related internal controls.

Continuous audit or a detailed audit is an audit which involves a detailed examination of books of account at regular intervals i.e. one month or three months. The auditor visits clients at regular intervals during the financial year and checks each and every transaction

Advantages of Continuous Audit

1. Easy to quick discovery of errors:
2. Knowledge of technical details:
3. Quick presentation of accounts:
4. Keeps the client's staffs alert:

Disadvantages of Continuous Audit

1. Alteration of figures:
2. Disturbance of client's work:
3. Expensive:
4. Queries may remain outstanding:

Errors in Auditing

1. Clerical Error-
2. Errors of Principles-
3. Errors of Duplication-
4. Errors of Compensation-