Technology and Quality Audits
The main purpose of an audit is to judge the reliability of the quality, technology and the supporting records for a particular period of time, i.e. one year is typical. The auditor carries out a process of examination and verification of processes and procedures and relevant documents. Such an examination will enable the auditor to report to his client on the condition and working results of the organization. While carrying out the examination of the various processes, procedures, relevant documents and evidences, the auditor may come across certain errors and faults. Despite such a possibility the detecting of errors and faults is an incidental object. At the same time the auditor also discloses how far the technology and quality systems adopted in the operation is adequate and appropriate in producing the product(s) in question as well as any weakness of these systems.
Why do an Audit?
- It is obligatory for cumulative evaluation.
- It develops worth of care as both an outcome and by the procedures of performing the audit.
- It is an aid to ongoing checkup of technology and quality programs.
- There is intelligence of company and professional achievement and serves as a guide for self-improvement.
Advantages of Auditing
It is compulsory for all the organizations registered under the companies act must be audited. There are advantages in auditing the accounts even when there is no legal obligation for doing so. Some of the advantages are listed below:
- By auditing the accounts, errors and faults can be detected and rectified in a timely manner.
- Audited companies carry greater authority than the companies that have not been audited and certified.
- Regular audit of accounts create fear among the employees in the company and exercise a great moral influence on clients staff thereby restraining them from commit faults and errors.
- Due to the fear of the audit the work of company always remains current and correct in all respects.
- In case of joint Stock Company where ownership is separated from management, audits ensure the stakeholders that proper process are in place, records are utilized for the right purpose and the management have not taken any undue advantage of their position.
- The errors whether dedicated innocently or deliberately are exposed by the process of audit and its attendance prevents their occurrence in the future. No one will try to entrust an error or fault as the accounts are subject to audit and hence they will have a fear of being noticed.
- The audit of accounts by a qualified auditor also help the management to understand the current position of the business and helping management to make decisions on various matters like report internal control systems of the organization or setting up of an internal audit department, etc.
- The errors are exposed by the audit and its attendance prevents their repeat in the future because errors are discovered early.
- If the accounts have been audited by an independent person, disputes between the various organization factions can be settled amicably.
- The auditing agency is able to impart their corporate ideals upon their partner companies.
- The auditor would notify management if the process, procedures, and evidence are not prepared and up to date.
- As a result of the audit, management will be notified about the business operation and inner-workings of the company that it would not have had without the audit.
Generally accepted auditing standards (GAAS)
It is important to have an understanding of what the term means:
- Only competent and independent personnel carry out the audit.
- During the performance of the audit that the work is well planned and executed.
- Sufficient and appropriate audit evidence are gathered and tested before an opinion is presented.