In ancient period, there was limited scope of audit because there was no development of business. Generally, auditor used to check cash transactions if there were suspected frauds. But in the recent years, scope of audit has increased. Now-a-days auditing is related to the examination of books of account, evidence, bills, stock and its physical verification etc.
Now-a-days, it is not possible to go through the books of account. So, an auditor applies test check. But such test is possible in such organization where effective internal check system is applied. An auditor should analyse the suspected frauds so as to find out the fact but an auditor should depend on the information provided by the concerned officer.
An auditor should prepare and present report after the examination of profit and loss account and balance sheet. Auditor does not only check the books of account on the basis of evidence but also has to check the authenticity of documents. An auditor should set his mind in that area where he is not satisfied with the records. Despite having above facts, attention of audit can be set up as follows:
i. Checking of books of accounts so as to find out the truth and fairness.
ii. Verification of assets and liabilities after its detail checking.
iii. Checking of books of accounts on the basis of available evidence.
iv. Checking arithmetical accuracy of books of accounts.
v. Expressing independent opinion about the financial statements.
vi. Preparing and presenting fair report to the concerned officer or owners.