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Category Archives: Audit

What are All the Types of Audits in India

Auditing in India is the process of inspection of an individual’s or organisations records by an independent body or person with a specialised skill and knowledge of conducting the audit.

According to the Institute of Chartered Accountants of India:

“Auditing is defined as a systematic and independent examination of data, statements, records, operations and performance (financial or otherwise) of an enterprise for a stated purpose. In any auditing situation, the auditor perceives and recognizes the proposition before him for examination, collects evidence, evaluates the same and on this basis formulates a judgment which is communicated through an audit report.

There are different types of audits in India:

Social audit

Social audit refers to the process of reviewing the official records and analysing whether the reported state of expenditures matches the actual money spent on the grounds of it.

It is organised mostly by Civil society organisations (CSOs), Non-governmental organization (NGOs), political representatives, civil servants and workers of Dungapur district or district of Rajasthan and Anantapuram district of Andhra Pradesh. The motive of this audit is to prevent mass corruption under the Mahatma Gandhi National Rural Employment Guarantee Act.

Statutory audit

Statutory audit is the kind of process in which the audit is based on the laws applicable on an entity for the time being of it in force. It is governed by the Indian Accounting Standards issued by the Institute of Chartered Accountants in India. An individual or a partnership firm having the certificate of practice of the chartered accountant in India is eligible to conduct the audit of the entity.

The two most common types of statutory audits in India are tax audits and company audits.

Internal audit

This type of audit is an activity of consultancy and objective assurance to improve the operations of an organisation. It helps in understanding the objectives of the organisation by bringing a systematic and disciplined approach to the way of working. The results of this audit are effective in risk management, control and governance processes.