What is Audit in Finance
Do you know what an audit is? Auditing means examining your financial accounts. Actually, audits are done by those who do business or do any work of their own.
The audit is done by the Income Tax Department. An audit is done once in every financial year, i.e., every year.
It can also be done on your own behalf, and you can also ask for an audit on behalf of the Income Tax Department at any time. The audit is done by a chartered accountant.
For Taxable Income
The details of income and expenditures are checked by a qualified chartered accountant. Its purpose is to study whether the businessman has reported his income and expenses according to the rules or not.
If this does not happen, then the Income Tax Department can also take action soon.
Objective
The audit is done by the key personnel of any department. So at the same time, it can also be done by an outside firm.
Audits are mainly done for the purpose of verifying and checking accounts. Auditing also avoids fraud and miscalculation.
All the government firms do audits for their quarterly reports on the account information of the entire firm. This audit is done by an independent auditor.
Who Can Audit?
In India, chartered accountants of the ICAI or chartered accountants of India can conduct an independent audit of any organization. A CPA, or Certified Public Accountant, conducts auditing in the United States.
Steps of Auditing
There are four main steps in the auditing process. The first is to define the role of an auditor and the term of engagement, which is usually in the form of a letter duly signed by the client.
Second Step
The second step is the planning of auditing, in which details of the time frame of auditing are given as well as which departments will be involved in it.
Depending on the timing, the auditions may take place a day before the last day and may also take place in the same week.
Third Step
In this, the auditor checks whether the department that has been audited is correct or not. Also, all the information is compared. After this, in the end, the final report is kept in a systematic way.
