Various types of Audit
An audit is a task of careful and in detail checking or examining of cost and financial statements from company or organization to make sure that they are correct and complete or a report that showing the results of this check. It is the process of reviewing and investigating any aspect of a business, whether financial or nonfinancial. It can apply to an entire organization or might be specific to a function, process, or production step. There are three types of audit, those are:
(a) Financial Statements Audit
Financial audits invoke the evaluation of internal control processes sever revenues and expenses, and the accuracy of their reporting in accordance with laws, regulations and internally developed policies and procedures. In addition, the safeguarding of the University’s assets, as well as the fair presentation of its rights and obligations may be the subject of financial audits.
(b) Operational audit
Operational audits examine the use of the university’s resources to evaluate whether those resources are being used in the most efficient and elective way to fulfill the university’s mission and objectives. These are sometimes called performance audits. An operational audit may include elements of both a financial and compliance audit.
(c) Compliance audit
Compliance audits review both financial and operating controls and transactions to see how well they conform to established laws, standards, regulations, and procedures. In addition, the audit might identify gaps between regulations and university procedures, and in turn, would suggest training and follow-up programs ensure personnel is adequately informed about compliance requirements.
Or, The audit May be classified into-
On the basis of legislative control statutory audit:
- Government Audit: The audit accounts of union of states, Government departments undertaking, weal bodies are done by government auditors.
- Private Audit: Private audit, there is no statutory or constitutional compulsion to get the account audited.
On the basis of the relation of auditing:
- External Audit: External Auditor verifies the truth and fairness of financial information as reflected in financial statements of the entity.
- Internal Audit: An internal auditor is usually appointed by the management of the company in many cases the internal auditor is in regular employment of the company.