Lakhasly

The purpose of the audit can be better understood as why it is a necessity today in the present environment, the reason for which can be the growth of an organization, increase in its size and stakeholders, complexity in the nature of business operations, change in legal and business environment, or to judge the responsibilities delegated to the management.It is a systematic and scientific examination of the books of accounts and records of a business/organization in order to ascertain/verify whether the financial statements and the reports presented by the management are free from certain material misstatements/mistakes, which may affect the true and fair view of the financial statements.Since the size, volume, and complexity of an organization's transactions have increased multi-fold, the opportunity of making errors is constant.

The purpose of the audit can be better understood as why it is a necessity today in the present environment, the reason for which can be the growth of an organization, increase in its size and stakeholders, complexity in the nature of business operations, change in legal and business environment, or to judge the responsibilities delegated to the management. Since the size, volume, and complexity of an organization's transactions have increased multi-fold, the opportunity of making errors is constant. The errors may be committed intentionally to conceal the true position or due to a lack of understanding of the treatment of a particular transaction. Hence, an increase in size results in an increase in the figure of errors/mistakes. So, to determine whether the errors have occurred and to find the exact position of the business, there is a requirement of an effective tool, and it is an audit. The auditors many times trace such errors while examining the transactions and inform the same to the management.
Every topic/concept has its own beginning and associated purpose. Without understanding the purpose for initiating a work or activity, the effort might end up in unsatisfactory results. Audit, being a tool, has its own purpose for getting initiated. It is a systematic and scientific examination of the books of accounts and records of a business/organization in order to ascertain/verify whether the financial statements and the reports presented by the management are free from certain material misstatements/mistakes, which may affect the true and fair view of the financial statements. Based on the purpose of the audit, the planning of the entire work is structured.