An audit which is conducted in between the two annual audits with a view to find out interim profit to enable to company to declare a interim dividend, is called interim audit. It is a kind of audit which is completed between the periodical or balance sheet audit.
Advantages of Interim Audit
- It is good where the publication of the interim figures are necessary.
- Due to interim audit, final audit can be completed very soon.
- Errors and frauds can be more quickly found and detected during the course of the year.
- There is a moral check on the staff of the client as the accounts are checked, say – after three months or six months.
- Proper utilization of time is made by audit staff.
Disadvantages of Interim Audit
- Figures may be altered after interim audit.
- Interim audit creates additional burden of work on accounts staff.
- This type of audit is not suitable for small business firms.
- Interim audit is very costly.
Distinctions Between Continuous Audit and Interim Audit
- Continuous audit is carried as per the convenience of the auditor and his client while interim audit is done up to a definite date according the instruction of the client.
- In the case of continuous audit, the verification of assets and liabilities is done after the balance sheet has been prepared at the end of the accounting period while in the case of interim audit the assets and liabilities are verified when such an audit is conducted.
- In the case of continuous audit, no trial balance is prepared. Though, the totals of certain accounts may be noted while in the case of interim audit the trial balance has to be prepared or checked.
- In the case of continuous audit, the object is not to know the profit or loss while the interim audit is conducted with the object of finding the profit or the loss.
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