In today’s article we will talk about Audit, Auditing and Auditor like Meaning of Audit, Auditing and Auditor, What is audit, Auditing and Auditor?
Meaning and Definition of Audit
Meaning of Audit
What is Audit?
Audit is the annual inspection process of a company or organization and the audit is done by an auditor who is a CA (Chartered Accountant) by profession.
Also Read: What is Audit, Auditing and Auditor in Hindi
Meaning and Definition of Auditing
Meaning of Auditing:
When a chartered account or income tax department takes an in-depth look at the expenses and income figures of a company or organization, they are measured to see how much of the company’s share is within 1 year of the organization. Earned and how much was spent, whether the organization or company is doing some kind of wrongdoing or tax evasion, all these things are done in auditing. Auditing is done in two ways, one is done within the company and the other is done outside the company.
What is Auditing?
Auditing is the annual inspection process of a company or organization. Under which the income, expenses and other accounting data related to the company are inspected. The process of audit is done by the company and also by the Income Tax Department. The income and expenditure figures are examined by the company by a professional Chartered Accountant (CA) to check the growth of the company. Whereas the purpose of the audit of the Income Tax Department is to examine the taxation related procedures of the company.
Types of Audits?
As it is clear from the above definitions that the verification of accounting data is called audit. Under this process, the annual growth of any institution is estimated. Now know about the types of audits. There are mainly two types of audit and audit, there is an internal audit and an external audit.
1. Internal Audit:
Under this process, an organization or company calculates its annual profit or loss. This process is done by the organization through its designated employees CA (Chartered Accountant). Or sometimes externally, through independent audit agencies. This process can also be done on half yearly basis. But the books of account are compulsorily checked once in a year.
2. External Audit:
This type of audit process is usually done by the Income Tax Department. The purpose of which is to assess the errors in the payment of tax liabilities of the company. This action is taken when the Income Tax Department suspects that a company has not paid the correct tax relative to its profits.
Purpose and Objective of Audit
Audit is a very essential process for any company or organization because without audit we cannot ascertain the growth of the company’s performance. Under this process, the objective of checking the books of account is the correct assessment of the business of the company and the desired tax checks. The business company or group ascertains its annual income and expenses through the audit process. The profit of the company is also ascertained on the basis of the known results. Talking about the process of income tax, tax is levied on any company according to its profit. The main objectives of the audit process include eliminating data errors, prevention of irregularities in the organization and rectification of mistakes made.
Who does the Audit?
Talking about India, Chartered Accountants (CA) of ICAI or Chartered Accountants of India can audit any organization. Apart from this, the Income Tax Department conducts audits to check irregularities related to tax payment.
What is Auditor?
An auditor is a person who audits a company or organization. The auditor examines all the accounts of the companies or organization and checks its performance. The auditor can be inside the company or outside the company.