AUDITING
The word audit comes from the Latin word audire, meaning
to hear.
Introduction
The purpose of govt. audit is to ensure
transparency and accountability in the use of
resources in all types of govt. management.
The objectives of audit work includes
verification of statements of accounts and
statement of income and expenditure to
determine whether these are prepared truly
and correctly.
BACKGROUND
The major concerns in the context of public
financial management in Bangladesh have
always been to see how well the scarce
public resources are utilized
The stakeholder expect that the audit office
provide them with more information in the
line of 3Es
AUDIT IN BANGLADESH
In Bangladesh , the Office of the Comptroller
and Auditor General(C&AG) is the supreme
audit institution and it is the only body
entrusted to carry out the performance audit
The legal authority of C&AG to carry out the
performance audit derives from two main
sources
TYPES OF AUDIT
Financial Audit: The purpose of conducting a financial
audit is to give an opinion on whether the financial
statement prepared by the public sector agencies shows a
true and fair view of the Financial position
Compliance Audit: Compared to a financial audit, it is
not compulsory for the compliance audit to be
conducted to all government agencies yearly. This type of
audit is performed on cyclical basis. In compliance
auditing , the Auditor General will examine and review
the transactions and activities of ministers/departments
or agencies to determine whether they have conformed
to all laws and regulations.
TYPES OF AUDIT
Performance Audit: The performance audit involves
studies and evaluation of specified programs or
activities of ministers/department and other
government agencies
Advantages of Audit
1. Verification Of Books And Statement :-
The main object of audit is the verification of the books
and the financial statements of the company concerned.
2. Discover and Prevention Of Error :-
While examining the books, auditors detect some errors.
These are various kinds of errors. So audit is very useful in
preventing and detecting the errors.
3. Moral Check :-
When each staff of the company knows that this financial
transactions will be examined by the auditor then he fears
to do that fraud. The fear of their detection acts as a moral
check on the staff of the company
Advantages of Audit
4. Check On Directors :-
Audit acts a check upon the directors and precaution
against fraud on the part of the management.
5. Proper Supervision :-
Sometimes owner of the business can not look after
the business personally. Audit acts as a check on
employees and it saves the owner from losses.
6. Valuable Advice :-
The auditor has expert knowledge about the
accounts and finance problems, so he may be
consulted about these problems.
Disadvantages of Audit
The payment of audit fee brings extra cost burden to
the organizations
During and audit the auditors requires the attention
several companies stuff and therefore cause
disruption
An audit doesnt assure future viability of the
organization audited
An audit doesnt assure the effectiveness and
efficiency of management
Auditor express opinions and therefore doesnt give
total assurance of the two fair presentation of annual
reports
Conclusion
A review of the historical development of auditing has
shown that the objective of auditing and the role of
auditors are constantly changing as they are highly
influenced by contextual factors such as the critical
historical events (e.g. the collapsed of big
corporations), the verdict of the courts, and
technological developments (e.g. advancement of
computing systems and CAATs). It can be observed
that any major changes in these contextual factors are
likely to cause a change in the audit function and the
role of auditors. As a result, auditing is seen to be
evolving at all times.
However, it is important to note that the change in societys
expectation and the response of the auditing profession
towards these changes are not always at the same pace. Hence
there is a natural time gap between the changing expectation
of the users and the response by the profession and due to
this time gap there arises what has been stated as the
expectation gap or audit expectation gap (Saha & Baruah,
2008). Even though the existence of such a natural time gap is
inevitable, Flint (1998) advises that auditors should be
sensitive to the changing expectation of the relevant groups
while at the same time containing these expectations within
the constraints of what is possible. He also claims that there
are inevitably economic and practical limitations on what an
audit can do, and this is something which those who wish the
benefit must understand.