Auditing Essay

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Introduction: The economic decisions must depend on available information; for example the banking decisions of giving a loan is depend on the previous reports and statements of the company which give a hall picture of the company financial situation. Any mistake in this information my effect on the performance of the company then effect on the borrowing. So, if the bank depends on the incorrect financial information for a company; the company will face difficulty to pay back the loan in the end and the bank loses both of the principal and the interest. Also, the bank deprive giving these money to another company may use it effectively. In the other hand, if we talk about the social situation, the phenomenon of spread incorrect information will increase in the society. Audit work is delicate work because it must extract the correct information about the organization. Definition and Objectives of Auditing: Generally, Auditing define as a review. It is presenting and studding information carefully and the main purpose is for investigation. Mr. Montgomery defines auditing as “a systematic examination of the books and records of a business or other organization in order to ascertain or verify and to report upon, the facts regarding its financial operation and the result thereof”. We can classify the objective of auditing in two parts; primary objective and secondary objective. In primary objective, the main purpose of auditing is to support financial period by determining statements and accounting records. It also gives a clear picture for the auditor about the situation of the organization. The secondary objective is to present a report about the situation of the organization and check the account books. It is possible some mistakes, errors and frauds during auditing process. The fraud from the auditor is comes in two faces; detection and cover up the error

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