AUDIT IS INDEPENDENT EXAMINATION OF FINANCIAL INFO OF ANY ENTITY, WHETHER PROFIT ORIENTED OR NOT & IRRESPECTIVE OF ITS SIZE OR LEGAL FORM WHEN SUCH AN EXAMINATION IS CONDUCTED WITH VIEW TO EXPRESSING AN OPINION THEREON.
The word 'Audit' is a derivative of the word 'Audition' which means 'to hear'. In earlier times, the Kings used to hear their accountants narrate the accounts verbally. However, as the complexity of the accounting function grew, need was felt to thoroughly check the accounts for mistakes/misclassification and document the findings in a written form so that it can be used by the Management, stakeholders, investors, Government and various other bodies. This process is known as Auditing or Audit.
The most general definition of an audit is an evaluation of a person, organization, system, process, project or product. Audits are performed to ascertain the validity and reliability of information, and also provide an assessment of a system's internal control. The goal of an audit is to express an opinion on the person/organization/system etc. under evaluation based on work done on a test basis.
The word audit is derived from latin word 'audire' which means 'hear' . In older days also persons are appointed to check the accounts of the parties . he used to call them and hear the explanation needed . The person who heard the accounts came to be known as AUDITOR
External audit is an independent examination of financial statements by professional person (AUDITOR)to state if the financial statements, taken in whole present TRUE and FAIR VIEW in respect of financial position (balance sheet), performance (income statement), cash flows, statement of change in equity (SOCE)etc,
Audit refers to an independent examination of financial information of any entity ,whether profit oriented or not,and irrespective of its size or legal form when such an examination is conducted with a view to expressing and opinion thereon.
Audit refers to the assessment of conformity of the process with the envisaged rules and regulations and reporting deviations, if any, for taking corrective measures. So Audit is a check on authorities to complying with rules and regulations.