Book Keeping, Accountancy, Auditing

Book Keeping, Accountancy, Auditing Book Keeping: The term refers to systematic recording of transactions in books of original entry and their posting to ledger. It involves the following steps: (1) Journalising (2) Posting to ledger (3) Totalling of accounts, and (4) Balancing Accountancy: Work of accountancy starts where book- keeping ends. t is not wrong to say "Accountancy begins where Book-keeping ends."The work of accountant is to check the accounts that have been prepared by the book-keeper and make trial balance and balance sheet. Accountancy consists of the following steps: (1) Preparing Trial Balance (2) Making the entries for the rectification of errors and adjustments (3) Preparing Trading and Profit & Loss account, and (4) Preparing Balance Sheet Auditing: Auditor - “It is the end of accountancy and the beginning of auditing.” After the accountant finishes his job, the auditor is called to check the work that the accountant has done. It is not the responsibility of the auditor to draw up the accounts. He is mainly focused on the thorough analysis and validation of the accounts made by another person. Main objectives The main objectives of auditing are constantly changing with the progress of business technologies. Initially, it was mainly about checking the correctness of the records of receipts and payments which has now progressed to the detection of frauds. The techniques of auditing the accounts have also become more sophisticated. The "Statement on Standard Auditing Practices: Objectives and Scope of Audit of Financial Statements" (SAP 2) released by the Institute of Chartered Accountants of India holds that the objectives of financial statement auditing are as follows: 1) An audit of financial statements that have been prepared in accordance with a specific set of accounting policies and practices that are recognized by the auditor, as well as any relevant legal requirements, is seen as a tool for the auditor to express their opinion on the financial statements. 2) The opinion of the auditor assists in the determination of the true and fair view of the financial position and operating results of the business. According to Clause 227 of the Companies Act, 1956, the auditor is required to provide assurance on the correctness of records and also on the assets, liabilities, and transactions. Therefore, the main goal of audit is to express an independent judgment and opinion on the records' reliability and the financial state of affairs and working results' truth and fairness. Main Purposes The main purposes of auditing can be outlined as: 1. To assess the systems and procedures that the business uses. 2. To check documentary evidence published to mark the accuracy of recorded transactions. 3. To evaluate the accounting system and internal control. 4. To confirm the true value and presence of assets. 5. To conduct a mathematical accuracy assessment of recounting statements. 6. To state the values of exhibits that are truthful and fair. 7. To propose possible remedial measures of the internal control and accounting system 8. To find out whether the statutory requirements are fulfilled 9. To ascertain if the commonly accepted accounting principles and accounting standards have been accurately applied. 10. To ascertain the distinction of capital and revenue items Secondary Objectives In the course of the analysis, the books of accounts and documents are examined to determine whether the financial statements show a true and fair view of the financial position and the operating results of the enterprise; meanwhile, some errors and frauds might be found.