TYPES OF AUDIT

TYPES OF AUDIT

(1) Economy and Efficiency: This type of audits attempts to identify whether the entity is managing and utilizing its resources economically and efficiently and addresses areas of uneconomical or inefficient tendencies for management information.

(2) Programme Results: This type of audits identifies whether desired results and objectives are being achieved and recommend alternative where necessary.

(3) Financial and Regularities: this type ensures that system of account and financial controls are efficient and operating properly and transactions have been correctly authorized and accounted for, it is also to verify that expenditure has been incurred or approved services in accordance with the regulations guiding the entity.

(4) Value for Money: this examines whether programmes or project under meets the goals and objectives establishing the entity. Audit types are further classified into:

(a) Statutory: These are auditing carried out in compliance with the provision of the companies and allied matters Act, 1990. It is a compulsory requirement for some selected firms registered under the act.

(b) Non-statutory: these are the ones carried out by the company itself using its own employees. It can be grouped by references to instruction such as complete audit etc.

(i) Complete: This can be described as one in which the auditor is given unrestricted scope as to work which he is to perform and in which he uses his own discretion as to the extent of the detailed work. The auditor may be held liable for anyloss arising through his neglect in any such case.

(ii) Partial: The idea of this means that the auditor is restricted to a particular area of work only or is restricted in any way as to his power of enquiry.

(iii) Continuous: A continuous audits is one where the auditor or his staff is constantly engaged in checking the accounts during the which period or where the auditor or his staff attends at regular or irregular intervals during the period.

(iv) Final: This is one which is not commenced until after the book have been closed at the end of the financial year or which is only commenced towards the end of the financial year carried through to completion after the end of the year.

(v) Internal and External: The basic difference is the body been whose behalf the audit work is concluded. In an external audit, a report is made to a person external to the audited entity especially the shareholder and members of the legislature. In an internal audit, it is an independent appraisal of the activities within an organization for the review of accounting financial statements and other operations basic form for the service to management. It is a managerial control, measuring and evaluating the effectiveness of other operational controls.

(vi) Annual audit and Ad-Hoc: Annual audits is the regular audit usually governed by statute, while ad-hoc audit is as a result of needs for investigation.

(vii) Pre, Post and continuous audit: There is distinction between the three types. It depends on the time when the audit is carried out but pre audit is a check before financial transactions takes place. This is to prevent irregular and wrongful expenditure. Continuous audit is the examination of larger entities during the financial year.