Disadvantages of auditing
Answers
Auditing refers to the periodic examination of accounts, documents, and vouchers in a corporate world. This financial certainty will help people understand the ascertained workplace. Here the vouchers and accounts cannot fulfill.
The main objective of the auditing is to provide a suggestion on financial reports and statements.
Disadvantages of Auditing are:
Extra cost:
Testing involves the extra cost to the organization which is considered a burden. It involves the disruptions of multiple cases. The auditor has to concentrate more even though there are disruptions.
Evidence:
Evidence that is identified is more pervasive than conclusive. The strength of the submission of audited accounts makes major changes in the accounts of the distribution of profits.
Harassment of staves:
Since the employees cannot express their own in terms of auditing, these changes are calibrated and the employees will feel harassed due to the changes that are caused.
Unsuitable changes:
The rules and regulations of business may vary from time to time. It remains unstable when the program begins. The company’s policies may not change periodically whereas the rules and regulations may.
Chances of fraud:
Since the information delivered after the audit procedure is credential then there becomes more chance of getting the situations where an individual will be forced to commit the crime. It harasses the auditors to commit crimes after the audit gets over.
Small concerns:
Small-scale industries may usually proceed with transactions that are usually completed within a shorter period. Thus, auditing is not too important.
Not guaranteed:
Auditing cannot provide any data that are analyzed and prepared. It has financial accounts for the data that are provided. It is disclosed based on the information and explanations that are agreed on by the clients.
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Demerits or Disadvantages of Auditing:
The main risk in the audit program is towards the assurance services that derive wrong conclusions. Assurances are to be provided within the related certification. Here are some of the limitations of an audit.
1. Extra cost:
Testing involves the extra cost to the organization which is considered a burden. It involves the disruptions of multiple cases. The auditor has to concentrate more even though there are disruptions. Before the audit begins the auditor must get the attention of all the staff members of the organization.
2. Evidence:
Evidence that is identified is more pervasive than conclusive. The strength of the submission of audited accounts makes major changes in the accounts of the distribution of profits.
3. Harassment of staves:
Since the employees cannot express their own in terms of auditing, these changes are calibrated and the employees will feel harassed due to the changes that are caused. Even if they try to express their knowledge of new ideas, the organization may not entertain the employees in these types of situations.
4. Unsuitable changes:
The rules and regulations of business may vary from time to time. It remains unstable when the program begins. The company’s policies may not change periodically whereas the rules and regulations may.
5. Chances of fraud:
Since the information delivered after the audit procedure is credential then there becomes more chance of getting the situations where an individual will be forced to commit the crime. It harasses the auditors to commit crimes after the audit gets over.
6. Small concerns:
Small-scale industries may usually proceed with transactions that are usually completed within a shorter period. Thus, auditing is not too important.
7. Problems in remedial measures:
Here the problem is created in remedial measures that are enhanced by the detailed interface of the data of remedial measures. These remedial measures are not included in the audit program.
8. Insufficient considerate:
The education curve will be contented about the business and insufficient relaxed networks and also offers systematic internal recruitment. These may gravely obstruct the expense of all the employees.
9. Not guaranteed:
Auditing cannot provide any data that are analyzed and prepared. It has financial accounts for the data that are provided. It is disclosed based on the information and explanations that are agreed on by the clients.
Conclusion:
Accuracy in the audit process plays a vital role that is reflected in the statement of the correct amount. Classification of the transaction is handled properly and timings are recorded on the exact dates.
Posting and summation of the master file amounts are properly classified. Therefore without the audit process, the progress of the company cannot be identified.