- Involves examination of financial statements to prove the true and fair view of company’s affairs.
- It is done mainly at year-end after the directors have prepared the financial statements, although the planning work could be carried out earlier.
- An audit is mainly governed by the international standards on auditing (ISA).
- The auditor must be independent of all the stakeholders such as management.
- It is a statutory requirement that financial statements are audited.
- Involves preparation of books of accounts to aid in decision-making.
- It is a continuous process carried out through out the financial period.
- In preparing financial statements and maintaining books of accounts, the accountant is guided by generally accepted accounting standards.
- Accountancy is a management function aimed at assisting management to run the business in an orderly efficient manner.
- It is a statutory requirement that all companies must maintain proper accounting records.