What Is The Scope Of The Audit?

International standard for accounting contains lucid information in respect of basic principles governing an audit scope of audit. Related portions of the above revised until October 1991 is given below:

• An audit is the independent examination of financial statements or related financial information of an entity, whether profit oriented or not and irrespective of its size, or legal form. When such an examination is conducted with a view to expressing an opinion thereon.

• This standard describes the overall objective of an audit and basic principles which govern the auditor's professional responsibilities and which should be complied with whenever an audit of financial statements and other financial information is carried out.

• Other international standards on auditing elaborate on the principles set out herein to give on auditing procedures and reporting practices. Compliance with the basic principles requires the application of auditing procedures and reporting practices appropriate to the particular circumstances.

• The objective of an audit of financial statements prepared within a framework of recognized accounting policies is to enable an auditor to express an opinion on such financial statements.

• The auditor's opinion helps the credibility of the financial statements. The user however should not assume that the auditor's opinion is neither an assurance as to the future viability of the entity nor an opinion as to the efficiency or effectiveness with which management has conducted the affairs of the entity.