Scope of An Audit

   Scope of an audit means the extent of audit tasks which are determined by an auditor for conducting the audit of a company. The determination of the scope of an audit depends upon the nature of audit.
For example, the internal audit has a different scope than statutory audit of a company. The audit standard No. 1 establishes the criteria for determining the scope of the audit of a company. They are described as……..
 1. Statutory requirements:
 This is one of the most important factors, which governs certain rules and regulations framed by the statute of a company for safeguarding the interest of the shareholders.
2. Proper planning:
 All the audit tasks should be properly planned and organized to cover all aspects of the entity relevant to the financial statements to be audited.
3. Reasonable assurance (self confident):
 To form an expert opinion on the financial statements, the auditor must ensure himself whether information contained in the accounting records and other source data is sufficient for preparation of financial statements. a) Study and evaluation of accounting systems and internal controls to
b) Tests, enquiries and other verification procedure of
4. Proper communication of information:
 The auditor must determine whether the relevant information is properly communicated by
a) Comparing the financial statements with the accounting records and other source data
b) Considering the assertions (claim) that management has made in preparing the financial statement
5. Proper evidence:
 In order to satisfy himself with respect to the correctness and adequacy of accounting records and other source, data contained in the financial statements, auditor must seek proper evidence.
6. Extension of work:
 If the auditor suspects any fraud or error after applying his selected tests, enquiries and other verification procedure, he must extend his audit tasks to confirm or allay his suspicions.