A Special Audit can be defined as a tightly defined type of audit that is conducted in order to probe into a specific area of the organization’s activities. As a matter of fact, it can be seen that this type of audit is mainly initiated by a third party, like a government agency or the tax authority.
Why is special audit required?
Special audits are needed when it is suspected that laws or regulations have been violated in the financial management of an organisation. In conjunction with investigating violations, audits can be carried out pertaining to duties, authorisations, responsibilities and internal control guidelines, for example.
Who Performs special audit?
(2) The chartered accountant or the company’s auditor appointed under sub-section (1) to conduct a special audit as aforesaid is hereafter in this section referred to as the special auditor.
What is special audit report?
Special audit reports are usually issued after inspecting the financial records of an auditee following a directive for the audit to be performed before the usual annual audit.
What are the objectives of cost audit?
The basic objective of cost audit is to ensure that the cost of production as well as cost of sales includes only those factors which are absolutely necessary and that those factors are used in the most efficient way. To verify that cost accounts/records are accurate.
What are the special areas of audit?
Examples of special audits are:
- Compensation audits.
- Compliance audits.
- Construction audit.
- Controls audits.
- Cost audits.
- Fraud audits.
- Information systems audit.
- Royalty audits.
What are the advantages of an audit?
Top 5 Benefits An Audit Provides
- Compliance. Obviously this is one of the main reasons to conduct an audit: to meet the statutory requirements and regulations in your industry.
- Business Improvements / System Improvements.
- Credibility.
- Detect and Prevent Fraud.
- Better Planning and Budgeting.
Who will Appinted special auditor?
The appointment is done by the members for a Maximum term of 5/10 consecutive years. The appointment is done by the Comptroller and Auditor General of India within 180 days from the 1st of April. The appointment is by the members within 3 months of the recommendations of Board and he will hold office till the next AGM.
What are disadvantages of audit?
Demerits or Disadvantages of Auditing:
- Extra cost: Testing involves the extra cost to the organization which is considered a burden.
- Evidence:
- Harassment of staves:
- Unsuitable changes:
- Chances of fraud:
- Small concerns:
- Problems in remedial measures:
- Insufficient considerate:
