Advantages And Disadvantages Of Auditing

Auditing is the systematic examination of financial records that is books and accounts. Auditing is necessary to obtain that the organization is showing true and fair view or not. Before starting any auditing first Company’s business process must be understood and also the auditor should know how the company uses its information technology and how this information technology affects the financials of the company. The auditor should have knowledge about manual control work and automated work which will be helpful for assessing the risk of material misstatement.
Auditing can be of two types:
1. Auditing in computerized environment
2. Auditing in Manual system
Auditing in manual system is the traditional audit and the auditing in computerized environment is recent new technique. The core differences between the audit in …show more content…
The audit file
Audit file is divided into Permanent file and Current file. Current file is maintained as the date of the audit report issued less than ten years should be long-term preservation of permanent archives. There are two disadvantages in computerized environment for maintain audit files. Main disadvantages are :
a. In computerized environment, data are stored in magnetic drive that is through electronic processing system so these kinds of media can be easily theft and also there are chances of loss, intentional or accidental destruction.
b. In computerized environment, Cost is high as hard drives and other memory prices are higher. Physical wear and tear is also a reason of loss in data for computerized environment.
9. The Auditors
Under the computerized environment, Auditor should possess a certain degree. Not only the capacity of judging and presenting capability but also the auditor should have knowledge in computer system that is Input control, data processing and also output control. In computerized environment there is a new system of audit and methods. So the auditor should have the knowledge to deal with this.