Partial Audit is a “kind of audit, where the work” of the auditor is curtailed. A partial audit is not permitted in case of limited companies because according to the Companies Act, the duties of an auditor of a company cannot be curtailed. An auditor signs the report clearing stating that the engagement is ‘partial audit’. Again, in case of a very big proprietary firm, it may not be possible for the proprietor himself to disburse all payments and if he suspects misappropriation of cash, he may appoint an audit or to check only the cash book.
Disadvantages of Partial Audit
Partial audit has the following disadvantages:
- The conduct of this type of audit is strictly restricted under the Companies Act.
- An organization and auditor cannot present as proof to the report of the partial audit because it is not a legal audit.
- This type of audit is conducted only for a particular purpose. The audit report does not reflect the financial position of the business as a whole.
- It cannot be widely used. This audit is made only for control purpose but it does not prove true and fair of financial position.
- A partial audit is not a statutory audit. So, the final audit is compulsory which is the misuse of time, labor and cost.
- The auditor may not be able to check and verify all the transactions. As such, there is every chance that some of the errors and frauds may remain undetected.
- If the auditor has several clients whose financial year ends on the same date, it may be difficult for the auditor to complete the work of all the clients within the scheduled lime.
