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Introduction to Auditing - Coggle Diagram
Introduction to Auditing
It is an examination of accounts where it is determined whether the financial statements give a true ofthe company´s financial situation and whether the company has a profit or loss
OBJETIVES
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Manipulation, falsification or alteration of records or documents
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IMPORTANCE OF AUDITINIG
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f. Long and short term creditors depend on audited financial statements while taking decision to grant credit to business houses.
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g. Taxation authorities depend on audited statements in assessing the income tax, sales tax and wealth tax liability of the business.
c. Shareholders, who do not know about day-to-day administration of the company , can judge the performance of management from audited accounts.
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a. Audited accounts help a sole trader in knowing the value of the business for the purpose of sale.
k. It safe guards the interests of the workers because audited accounts are useful for settling trade disputes for higher wages or bonus.
j. Audited accounts serve as a basis for calculating purchase consideration in case of amalgamation and absorption.
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