Objectives of audit.
Descriptions
- Objectives of audit.
According to Spicer and Pegler "The main object of audit is verification of accounts and statements prepared by the client and his staff. Although of great importance, the detection of fraud and error must be regarded as incidental to such main object. The prevention of frauds and errors by the reason of the deterrent and moral check imposed is also an advantage of considerable importance which is derived from an audit.
(I) Principal (or Main) objects
(II) Subsidiary (or Incidental) objects
(III) Other objects
- 1. Principal Objects: The main object of the audit is the verification of accounts and statements of a business as will enable the auditor to satisfy himself that the Balance Sheet gives business and that the Profit and Loss Account gives a true and fair view of the profit or loss for the financial period. Thus the principal objects of audit may be a true and fair view of the state of affairs of the stated as under:
(I)To verify the accounts and financial statements of a business.
(II)To find out whether the Balance Sheet gives true and fair view of the state of affairs of the business at the end of the financial period.
(III)To find out whether the Profit and Loss Account shows true and fair profit or loss for the financial period
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- (2) Subsidiary Objects: While performing the main object of audit of verification of accounts and statements, the auditor has also to detect errors and frauds . Thus detection of errors and frauds is incidental to the main object of audit Thus, the subsidiary objects of audit are
(I) Detection and prevention of errors
(II) Detection and prevention of frauds
- (3) Other Objects: In addition to the principal and subsidiary objects of are some of the other objects of audit. employees. audit, the following
(I) To have a moral check on employee.
(II) To comply with the requirements of the Companies Act. (iii) To create confidence and trust in government and other officials The objects of audit may be summarised as under:
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