Question

The main object of audit of accounts of a joint stock company is __________.

• A. Detection and prevention of errors
• B. Detection and prevention of frauds
• C. Detection and prevention of errors and frauds
• D. To find out whether the balance sheet and profit and account are property drawn up according to Companies Act and that they represent a true and fair view of the state of affairs.

Answer 1

Answer: (D)

To find out whether the balance sheet and profit and account are property drawn up according to Companies Act and that they represent a true and fair view of the state of affairs.

Audit is a statutory requirement for joint stock company. The main object of audit of a joint stock company is to ensure the audit of all balance sheet items i.e. assets and liabilities.

Audit is done to ensure whether the balance sheet and profit & loss are drawn as per the Companies Act and it represents true and fair view of the financial position of the company.