TYPES OF AUDIT

We can identify three types of audits,4 namely,

  1. Financial statement audit
  2. Compliance audit
  3. Operational audit.

Financial Statement Audit

An audit of financial statements is conducted to determine whether the overall financial statements are stated in accordance with specified criteria. The financial statements commonly audited are balance sheet, the income statement, the cash flow statement and the statement of stockholders’ responsibility.

Compliance Audit

The purpose of compliance audit is to determine whether the auditee is following specific procedures, rules or regulations set down by some higher competent authority.

Operational Audit

An operational audit is a review of any part of an organization’s operating procedures and ...

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