The basic objective of auditing is to prove true and fairness of results presented by profit and loss account and financial position presented by the balance sheet. So, the key objective of an audit is to express an opinion on financial statements. To determine and judge the reliability of the financial statement and the supporting accounting records are the main purpose of the audit.
Its objectives are classified into two groups which are given below:
Primary Objectives of Audit –
The main objectives of the audit are known as the primary objectives of the audit. They are as follows:
- The purpose of auditing is to determine the fairness of statements. The financial statements can show a true and fair view after auditing.
- Examining the system of internal check. The auditor must be honest in his work.
- Checking arithmetical accuracy of books of accounts, verifying posting, costing, balancing, etc. There is a need to follow the accounting policies for preparing accounting records.
- Verifying the authenticity and validity of transactions. The auditor can indicate whether the prescribed laws were followed in the preparation of final accounts.
- Checking the proper distinction of capital and revenue nature of transactions.
- Confirming the existence and value of assets and liabilities.
- Verifying whether all the statutory requirements are fulfilled or not. The auditor can express an opinion on the accounting policies in the best interest of the business.
- Proving true and fairness of operating results presented by income statement and financial position presented by the balance sheet. So an attempt is made to show the fair view of financial statements.
Verifying whether all the statutory requirements are fulfilled or not. Proving true and fairness of operating results presented by income statement and financial position presented by the balance sheet.
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