What is Auditing?

Question

I need Complete notes on Auditing , please any one send me it will be appreciated.
Thanks

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Answer 1

Auditing takes up a whole semester. There's no way I can give you "complete notes". If you need to read up on auditing, go to the IFAC website below. You'll find all the auditing standards and explanations you need.

Answer 2

To audit the books is the vet the books or to check the entries in the books from the source documents.
Let me explain. You pay for the car petrol. The auditor will check the petty cash or the check to find out the car belongs to you or the company, then he will see if this is recorded in the expenditure column as your cash is gone by that much so you have less cash. Then he follows this through the bank statement if check was paid if the bank had removed this from the balance and in turn charges you ledger fees. The expense is revenue expense and not to be confused with the Capital expense. The car bough is the capital expense and is subject to the life of five year. This is assets. Enron went bankrupt as they showed the expenses wrongly. The auditor check the usage of the car if this is for the business or personal use as the tax authorities want to know this. They tax you if this is used by you is the car is the asset of the corporation and used by the corporation this goes in as proper running cost and tax is allowed . You do not pay tax on the expenses. The depreciation is whether straight line or reducing balance. I would suggest you buy the book by Frank Wood and go through entry by entry. There is internal audit, continuous audit and external audit. This big subject and goes under the laws of the countries. It is trick but fun. Don't scare the clients with the knowledge or bully them. You lose the clients/

Firozali A.Mulla MBA PhD
P.O.Box 6044
Dar-Es-Salaam
Tanzania
East Africa