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No of Chapters: 5
No of Pages: 75

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Introduction:

Audit has been defined in various ways but with little variations. According to Benin (2001) in his dictionary of management, Vol. 2 defined audit as a critical examination and analysis of an activity by an independent person performed to check the efficiency of the activity and often to check security. This definition is however narrow.

The international encyclopedia of social sciences defined auditing as concerned with the independent verification of the statement of financial position and the results of operations of an entity.
In Penguin Dictionary of Commerce it was defined as “inspection of a set of books and or accounts by a person other than the one who prepared them (with the object of ascertaining whether or not the books are properly kept and or the accounts shows a true and fair view of the state of affairs of the organization at the data stated) followed by a report to the persons by whom the auditors were appointed.” (Greener, 2000)

However, the up to date definition being accepted by many professional bodies is the one defined by the consultative council of Accountancy bodies (CCAB).
According to the definition, an audit is the independent examination of and expression of opinion on the financial statements, of an enterprise by an appointed auditor in pursuance of that appointment and in compliance with any relevant statutory obligation. The statement adds that the responsibility for the preparation of the financial statements and the presentation of the information included there in rest with the management of the enterprise. The Auditor’s responsibility is to report on the financial statement as presented by management. Jim Ade notes that the main purpose of an audit is to show whether financial statement reflect true view of organization position.

The preparation of the accounts of local government is a very complex operation with differing orientations, legal systems and accounts and control systems. The examination of such account by independent expert trained in the assessment of financial information is of benefits to those who control and operate such local government as well as to the nation.

It is clear in all the definitions state above that what is important in this case is the independability, checking the verification and efficiency of the system, ascertaining whether the proper books of accounts are maintained not so as to show a true and fair view of the state of affair of the organization on which the auditing is built.
Though there is variation in language and choice of words used by the different authors, it is crystal clear that they are all saying the same thing.