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1. “ Introduction of Auditing ”
Published by www.lecturesheet.com

2. Batch No- 26A5
1. Md. Ariful Islam Chowdhury
ID: B081721
2. Md. Nuhas Hossain
ID: B081720
3. Md. Abdullahil Kafi
ID: B081707
4. Md. Abul Kalam Azad
ID: B081715

3. I
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O INTRODUCTION
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I Auditing ensures the monitoring authority a review and correction
O mechanism,a paradigm of power –penalty suite. Auditing as an
N independent and professional medium emerged,not a part of industrial and
business service-but s one separate,unique,independent,a class by itself,a
O par excellence,with robes of technical education,expertise,experience and
F self-regulated discipline for ensuring standards of quality of work befallen
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onto its shoulders.
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4. Definition of Audit
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N •The word “audit” is derived from the Latin word “audire” which means “to
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hear”. The Introducer of the Double Entry system, Luca pacialo mentioned
O and descrived the duties and responsibilities of an Audier.
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C •According to Auditing and Assurance Standard (AAS) 1 by ICAI -
T "Auditing is the independent examination of financial information of any
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O entity, whether profit oriented or not, and irrespective of its size or legal
N form, when such an examination is conducted with a view to expressing an
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opinion thereon."
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•So we can say that, the term audit generally implies audit of financial
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U statements. Audit is a critical and intelligent examination of facts – financial
D or other wise, to give in the form of certificate or report an attestation, an
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T expert opinion or an expert advise.

5. I
N Objectives of an Audit
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U • The Objectives of Audit can be categorized into:
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T 1) Main Objectives
I 2) Secondary Objectives, and
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N 3) Specific Objectives
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6. I Main Objectives
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T •Expression of expert opinion
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D An entity prepares balance sheet to portray its financial
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C positions. It also prepares P & L account to disclose the operating results of
T the period covered in the statement. These financial statements are
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O submitted to the auditor for his checking and comment. The auditor checks
N and verifies these financial statements. Based on his checking in these
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respect, the auditor express his opinion about the quality of the financial
F statements concerning proper discloser of facts in the financial statements
and the truth and fairness of the financial position and operating results of
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U the enterprise, as disclosed in the balance sheet and profit and loss account
D respectively.
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7. Secondary Objectives
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O • There are certain inherent limitations of audit examination.it would
D not be possible for auditor to discover all errors and frauds,in the
U financial statements due to the limitations of his checking. The
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T Auditing and assurance standard(AAS) Describes the secondary
I objectives of Auditing which are mentioned below-
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• The secondary objectives are-
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F – Detection and prevention of errors, and
– Detection and prevention of errors Frauds.
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8. These are descrived as follows-
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T 1. Detection and prevention of errors
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U • Errors are generally innocent but sometimes errors which might
C appear. The following are the various types of errors-
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I – Clerical Errors
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• These errors are committed in posting, totalling and balancing.
Such errors may again be subdivided into-
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• Errors of omission; and
A • Errors of commission.
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I – Error of Principle
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– Compensating errors or off- setting errors.
– Errors of duplication.

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2. Detection and prevention of Fraud
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O • Fraud means false representation or entry made intentionally or
D without belief in it true with a view to defraud somebody.
U • The following are the chief ways in which fraud may be
C perpetrated:
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O 1. Embezzlement of Cash
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2. Misappropriation of Goods
O 3. Fraudulent manipulation of accounts.
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10. I
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Specific objectives
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O • The Audit not only have primary and secondary objectives, it also
D have some specific objectives such as review of
U operations.Performance management policy,cost records and so
C on.Accordingly,there will be specific objective in respect of each type
T of such specific audits.For example,in operational audit,the aim of
I audit is to evaluate the existing operations of the entity in order to
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give expert advice to improve their efficiency.The cost audit is to
check the cost records of the entity in order to make a recort on the
O proper ascertainment of cost of production of goods or
F services.depending upon the nature of specific audit engagement and
terms of engagement,there may be different objective in respect of
A each specific audit.
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11. I Needs of Auditing
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O • Auditing is needs to add value to information by increasing its
D reliability credibility. Needs of Auditing can be specified as:
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C i. For detection and prevention of errors
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I ii. For detection and prevention of Frauds
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iii. To ensure true and fair view of the financial statements.
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12. Difference between Book- keeping, Accountancy and Auditing:
I Title Book- keeping Accountancy Auditing
N Definition The art of recording Service activity of Systematic and independent
T business transaction recording and examination of financial
R in the books of reporting. statement and to make an
O accounts and its expert opinion.
D posting and
summarizing.
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C Work level It is preliminary task Advanced task Final task
T Nature of Enter the transaction Adjusting and Examining that financial
I work posting and preparing financial statement and to express an
O summarizing. statement. opinion thereon.
N Person Who done this work Who done this work Who done this work is
involves is called Clerk. is called Accountant. called Auditor.
O Length of It’s a yearly It’s also a yearly Without continuous audit,
F work continuous process. continuous process. normally it is involved for
2/3 months.
A Qualification There is no required Academic knowledge Auditor must be a chartered
U qualification for is required for accountant.
D clerk. accountant.
I Responsibilitie He/ she must be He/ she must be He/ she must be responsible
T s responsible to the responsible to the to the appointer/ employers
Accountant. owner. and third party.
Mandatory It is used for all For knowing financial Without registered
enterprise. information, it is used organization it is not
for all enterprise. mandatory.

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