Audit is the examination of the books, accounts, voucher of a business to satisfy the auditor that the balance sheet is properly prepared and is showing the true and fair view of the state of affairs of the business and the profit and loss account gives a true and fair view of the profit or loss for the financial period according the the best of his information and explanations given to him and as shown by the books, and if not, in what respect he is not satisfied.
As per Institute of Chartered Accountants of India, audit is the independent examination of financial information of any entity, whether profit oriented or not, and irrespective of the size of legal form, when such examination is conducted with a view to expressing an opinion thereon.
Audit can be done either examining all the records or random checking of the records. It depends on the circumstance of business. If the auditor finds that there is a proper internal check or internal control of the management or the management has engaged the internal auditors then random checking of accounting records is also sufficient. Random checking of records means that auditing of few sample records and on the basis of these records the assessment of whole accounting records is done. In the absence of proper internal audit or internal control or internal check, whole records are audited.
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