Auditing

Meaning
Types
Importance
Internal
External
IRS tax
Financial
Operational
Compliance
Information system
Payroll
Pay
MCQ

1. AUDITING Presented by Sinchana S.D I M.Com Guided by, Sundar B.N, Asst. Prof of course co-ordinate, Post graduation studies in commerce, G.F.G.C.W Holenarsipura .

2. Contents Auditing meaning Different types of audit Importance of Auditing

3. Auditing meaning The term “audit” comes from the Latin word “ audire ,” which means “to hear.” The purpose of auditing is to confirm the financial status as stated in the financial statements. It reviews financial statements to see if they present an accurate and fair picture of its financial position and profit or loss .

4. Internal audit Internal audit refers to an independent service to evaluate an organisation’s internal controls, its corporate practices, processes, and methods. An internal audit helps in securing compliance with the various laws applicable to an organisation .

5. External Audit An external audit is an examination that is conducted by an independent accountant. This type of audit is most commonly intended to result in a certification of the financial statements of an entity. This certification is required by certain investors and lenders, and for all publicly-held businesses.

6. IRS tax In the United States of America, an income tax audit is the examination of a business or individual tax return by the Internal Revenue Service (IRS) or state tax authority.

7. Financial Audit A financial audit is an objective examination and evaluation of the financial statements of an organization to make sure that the financial records are a fair and accurate representation of the transactions they claim to represent.

8. Operational Audit An operational audit is an examination of the manner in which an organization conducts business, with the objective of pointing out improvements that will increase its efficiency and effectiveness.

9. Compliance Audit A compliance audit is an independent evaluation to ensure that an organization is following external laws, rules, and regulations or internal guidelines, such as corporate bylaws, controls, and policies and procedures

10. Information System An information technology audit, or information systems audit, is an examination of the management controls within an Information technology (IT) infrastructure and business applications .

11. Payroll A payroll audit, also known as a compliance audit, is an analysis of an organisation’s payroll-related processes. It identifies compliance problems concerning employment laws, verifies tax withholdings, spots human errors, and prevents payroll fraud, to name a few. Thus, it is vital to frequently do a payroll audit.

12. Importance of Auditing The audit helps in the detection and prevention of errors and frauds. The audit helps in maintaining the records and verification of books of the books of accounts. The independent opinion of the auditor is extracted through auditing which is extremely essential for the management of the company.

13. Auditing MCQ Questions _______ is the systematic study of books and records or a business. A. Auditing B. Vouching C. Verification D. Checking 2. When the auditor is an employee of the organisation being audited the audit is clasified as_______ Internal External Compliance Both A and B

14. 3. Auditing is derived from The Latin word_____ A. Audire B. Auditor C. order D. none of these 4. How much differents types of Auditing _____ A.9 B.8 C. 7 D.6

15. IRS full form ________ A.Internal revenue service B. Investment revenue service C.Interium revenu service D. Including revenue service