Auditing | Meaning | Scope | Objective | Limitations | Audit | Classification Part-1 | B.Com | BBA |
Accounting MasterClass・2 minutes read
Pooja Singh introduces the concept of auditing, its origin, meaning, and qualifications required for auditors in India, highlighting the growth of the profession post-Industrial Revolution and the importance of accurate financial statements for businesses. Auditing is an investigation by an independent auditor to verify financial statements, ensuring their accuracy through evidence collection and cross-checking to prepare a report on the company's true financial position.
Insights
- The concept of auditing originated from the Latin word "audit," meaning to hear, see, verify, and investigate, highlighting the foundational principles of the practice.
- Auditing in India has a rich history, formalized in April 1914 under the Indian Company Act of 1913, leading to the growth of the accountancy profession and the establishment of regulatory bodies like the Institute of Chartered Accountants of India (ICAI).
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Recent questions
What is the origin of auditing?
Latin word "audit," meaning to hear, see, verify.
When did auditing formally begin in India?
April 1914 under the Indian Company Act of 1913.
What is the scope of audit?
Review of financial statements for accuracy.
What qualifications are required for an auditor in a company?
Detailed qualifications for auditors.
Why is auditing necessary post-Industrial Revolution?
Increased business activities and capital.
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Summary
00:00
"Introduction to Auditing in Accounting Master Class"
- Pooja Singh welcomes students to her Accounting Master Class channel to start a new subject, Auditing, in today's lecture.
- The lecture covers the origin of auditing, its meaning, and when it began in India.
- The scope of audit, the differences between bookkeeping, accountancy, and auditing are discussed.
- Differentiating between accountancy and audit, as well as audit and investigation, is explained.
- Qualifications required for an auditor in a company are detailed.
- Auditing's necessity post-Industrial Revolution due to increased business activities and capital is highlighted.
- The concept of auditing originated from the Latin word "audit," meaning to hear, see, verify, and investigate.
- Auditing formally began in India in April 1914 under the Indian Company Act of 1913.
- The growth of the accountancy profession in India was spurred by the Act's requirement for annual audits by authorized auditors.
- The Chartered Accountants Act of 1949 established autonomy for the profession, regulated by the Institute of Chartered Accountants of India (ICAI).
13:05
Financial Auditing: Ensuring Accuracy and Compliance
- Auditing involves a review of financial statements within a specific period to ensure accuracy.
- The auditor collects evidence to verify the correctness of the company's financial statements.
- Auditing is an investigation by an auditor to prepare financial statements like revenue accounts and balance sheets.
- The auditor, independent from the company, conducts an audit to check the accuracy of the accounts.
- External auditors cross-check and verify the company's accounts to ensure correctness.
- The auditor prepares a report stating the financial statements' true and fair position after being satisfied with the audit.
