Whereas the split between the systems and balance sheet audits is concerned with the type of work covered, that between the interim and final audits is concerned with timing. The interim audit will normally take place approximately three-quarters of the way throughout the financial year.
There is an element of similarity between systems/balance sheet work and interim/final audits in as much as the majority of the systems work will be carried out during the interim audit and the majority of the balance-sheet work during the final audit. However, it will be necessary to complete some systems work during the final audit so that transactions between the time of the interim and final audits do not escape the auditor's attention. Similarly, some substantive testing is very likely to be carried out during the interim (e.g. verifying fixed assets additions to date).
With very small audits, it is sometimes considered unnecessary to carry out an interim audit. This means that, as a matter of convenience, all the audit work will be carried out in a single phase commencing typically, a short time before the year-end and continuing into the post balance sheet period.
At the other extreme, with large companies it is sometimes necessary to carry out more than one interim audit or, alternatively adopt a continuous auditing approach. In the case of a continuous audit the auditor's staff will either make several visits to the client spread throughout the year or, as in the case of very large companies, some of the audit staff will be present at the client's premises virtually all the time.