15 Objects Of Audit;( Primary and secondary)

Today we want to analyze what the objects of audit is and why it is necessary for organizations to carry them out.Those organizations that decide to implement and certify their processes according to the different international ISO standards and work with Standardized Management Systems.

Objects Of Audit;( Primary and secondary)

 Primary Objects of Audit

The main object of auditing is to examine the accounting policies. Accounting policies arc needed for preparing the accounting records. The auditor can express his opinion on the accounting policies in the best interest of business.


One of the most important objectives of audit is to determine the fairness of statements. Auditor examine the books of accounts to know the reliability of financial statements. The financial statement can show true and fair view after auditing.


forming and expression of an independent opinion ol auditor about the accounts of client is an important objective of audit. Auditor gives his opinion whether the accounts are showing True and fair view’ or not.


v Another object of audit is to check that prescribed laws were followed or not in preparation of financial statements. There are various laws which govern the working of many businesses.

  • . Errors of Commission

When incorrect entries are made in the books of accounts cither wholly or partly, the errors are known as errors of commission. Such errors arc discovered by vouching the purchases with the original invoices.

  • Errors of Omission

It means the error in which the transaction has been completely omitted from the records. Such errors can be located through thorough checking.

  • Compensatory Errors

Compensatory error means an error which is cancelled by an other error of same amount in the opposite direction. Detection of such errors require a complete and exhaustive preparation on the part of an auditor.

  • Errors of principles

These errors are occurred when accounting principles are not strictly followed. Ihe examples of • such errors:

  1. To show the revenue expenditures.as capital.
  2. Omission of outstanding assets and


  • Incorrect valuation

flic purpose of auditing is to detect the frauds. Fraud is intentional and is knowingly committed to defraud the proprietors of the concern. Frauds arc more serious than errors. Ihe frauds can be detected through vouching,

done they (easily agree to invest their money without any fear J ‘


The object of audit may be to satisfy the taxation officers. Through audit, tax matters are easily settled.


*uhc purpose of the audit may be admission of partner] The audited accounts show the true and fair view of bus.iness. The old and new partners can decide the terms and conditions for admission^! he value of assets and liabilities is agreed iipom^

  1. LOAN
  • he object of audit may be loan. The management can approach the banks and other money lenders, ([.he banks and other financial institutions easily rely upon audited accountsX/”’

The purpose of audit is to check the variations in profits. Business life depends upon the profits. An expert auditor can analyse the fluctuation in profits.


* (Determination of purchase consideration is also the object of audit) Throughxfudiled accounts the true value ol assets and liabilities can be determined.


The object of audit may be the proper supervision of business) Sometimes owner can not look after the business personally. Audit acts as a check on employees and it saves the owner from losses.

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