Question

Auditing may be done on ___________ examination of accounts.

• A. test basis
• B. in detail/ in-depth
• C. Both A and B
• D. None of above

Answer 1

Answer: (C)

Both A and B

Auditing is done for all the business transactions recorded in the books of account along with the available documentary evidence.

Audit may be done on test basis if the volume of transaction is large. In such method, a sample of vouchers are selected for audit. Sample documents have to be scrutinized in depth. Like sales vouchers, a sample of sales invoices are selected for audit.

Another way of conducting the audit is to have detail or in-depth audit where all the vouchers and records are verified in detail along with the proof of evidence.