External audit
on the basis of
function
Internal audit
Continous audit
periodical or final
or complete audit
Types of audit
Interim audit
Partial audit
Occasional audit
on the basis of
practical approach
balance sheet audit
Cost audit
Tax audit
Environmental
audit
social audit
External audit is independent auditor .at the end of the year or periodically he comes .periodically means
either once in a year . when we do audit its totally depend upon the need of an audit .An audit is an
inspection of a company’s financial records and statements. This inspection can be either internal or
external .External audits take time and cost money. Yet, they have benefits for a company. An external
audit improves the credibility of the company and its financial reports..
Internal audit he is from the organization means employee of the organization .Internal audit refers to an
independent service to evaluate an organization’s internal controls, its corporate practices,
processes, and methods. An internal audit helps in securing compliance with the various laws
applicable to an organization. An organization can prepare its accounts and records as per the
applicable legal requirements and reporting.
The purpose of an internal audit is to check the effectiveness and operational standards framed by
an organization. An organization may have a set of rules for operations, such as placing orders,
accepting deliveries, and making payments. An internal audit also helps in knowing whether the
employees follow the internal operational standards.
An internal audit helps in identifying problems or inefficiencies and taking necessary corrective
steps. Internal audits can identify any frauds by employees, such as embezzlement of funds .
Continuous audit means I want to continue my account to develop their good will . applicability
state bank of Pakistan published their quarter based report after 3 months. They detail about
accounts and ends report to make their final report it will be easy .everyday thousands of
transactions perfectly or not . volume of transactions very hard to do at 3 months . if organization
is very big 1200 transactions , at the end of month they investigate each transaction .
Interim audit means middle either it is quarter 6 months or 3 months . An interim audit is
type of auditing strategy that is normally utilized at some point during the
current fiscal year. This type of audit makes it possible to complete at least
some of the tasks that are involved with the preparation of a final audit once
the fiscal year has closed..
While a continuous audit and an interim audit are sometimes confused, the
two approaches are actually very different. A continuous audit typically
provides audit information that is accurate up to a specified date within the
fiscal year. For example, a continuous audit may be conducted monthly, with
each new audit showing changes that occurred since the last audit period.
Partial audit is done only for a specific purpose; for example, to check the receipt side or the
payment side of the cash book, to check cash sale, to check purchases or expenses only. The
reason for calling out for a Partial Audit largely depends on the Management of the organization.
To verify arithmetical accuracy of cost accounting..To help management to take decision
about production and cost variations. .To detect error and frauds .To have control over cost
accounting department..To give suggestions about efficiency of material, labour and
machine
every person carrying a business/Profession is required to get his accounts audited, if the
total turnover or gross receipts during the previous year exceed Rs. 100 lacs in case of
business and Rs. 25 lacs in case of profession.
Profit and Loss account of a business or profession is adjusted according to the provision of the
Income Tax Act, therefore accounting profit and tax profit differ.
Balance sheet audit is an annual audit and it covers each and every item of nominal accounts as
appeared in profit and loss account, assets, liabilities, reserves, provisions, stocks and surplus.
Balance sheet audit is also done by highly-skilled accountants.
Environmental audit It involves tools and procedures that are used to evaluate any activity which
can have environmental impacts. Examples of these activities include manufacturing, mining, forest
industries, land development, research and development, and any other activity which may affect
the environment.
A social audit is a way of measuring, understanding, reporting and ultimately improving an
organization's social and ethical performance. A social audit helps to narrow gaps between
vision/goal and reality, between efficiency and effectiveness.
Job to employes , furniture to university , transport system ,they are earning because of university ,
what role is being played by organization . they take part to road construction .