The following are the essential features of auditing:
Accounting Control
Audit is an instrument of accounting control. The truth and fairness of the accounting information is controlled and checked by auditing activities.
Safeguard
Audit acts as a safeguard on behalf of the proprietor/s (whether an individual or a group of persons) against extravagance, carelessness or fraud on the parts of the proprietors' agents or servants in the realization and utilization of his/their money and other assets.
Assurance
Audit assures on the proprietors' behalf that the accounts maintained truly represents facts and expenditure has been incurred with due regularity and propriety.
Assessment
Audit assesses the adequacy of the accounting system in order to ascertain its effectiveness in maintaining accounting records of an organization.
Review
Audit carries out a review of the financial statements to know whether the accounting records are in agreement with those statements.
Reporting Tool
Audit is a tool for reporting on the financial statements as required by the terms of the auditors' appointment and in compliance with the relevant statutory obligations.
Practical Subject
Auditing is a practical subject. It is something that people do. How it is done today is a result of long history of marginal changes and responses to new commercial and legal developments over the centuries with the most rapid progress in the last few years.
